Club Licensing Regulations 2015 2016 - MLSZ

Code of the

Regulations

KLSZ

Effective date: 05.11.2014

Last modification Not applicable

Valid until: 30.06.2016

Version number: 2014/1

Person responsible for

the Regulations

Licensing Administration

Responsible for the

Regulations and Issuer

Gergely Reményi

Club Licensing Regulations

2015-2016


Table of Contents

I. GENERAL PART .............................................................................................................. 4

1. Reasons for and purpose of the Regulations .............................................................................. 4

2. Effect of the Regulations ........................................................................................................... 5

3. Parties covered by the Club Licensing Regulations and its scope of application ........................... 5

4. Structure of the Regulations and the methodology applied ........................................................ 7

5. Definitions ................................................................................................................................ 8

II. THE LICENSING SYSTEM ................................................................................................ 13

1. Provisions on the licence ......................................................................................................... 13

Article 1. Principles pertaining to the Licence ............................................................................................... 13

Article 2. International and national club licence and admission to club tournaments ............................... 13

Article 3. Validity, refusal and withdrawal of the licence .............................................................................. 14

Article 4. Transfer of a licence ....................................................................................................................... 15

2. Provisions pertaining to the licence applicant .......................................................................... 17

Article 5.The Licence Applicant ..................................................................................................................... 17

3. Provisions pertaining to the Licensor ....................................................................................... 19

Article 6.The Licensor .................................................................................................................................... 19

Article 7. Provisions pertaining to administration ......................................................................................... 20

Article 8. Provisions pertaining to decision making bodies ........................................................................... 21

Article 9. Requirements for the members of the decision-making bodies ................................................... 22

III. CORE CLUB LICENSING PROCEDURE AND CRITERIA OF ACCEPTANCE .......................... 23

1. Core Club Licensing Procedure ............................................................................................. 23

Article 10. Principles of the Core Club Licensing Procedure.......................................................................... 23

Article 11. Provisions pertaining to the Core Club Licensing Procedure ....................................................... 24

Article 12. Core Club Licensing Procedure and Process Description ............................................................. 28

2. Extraordinary rules of the Club Licensing System pertaining to UEFA Tournaments ............... 30

Article 13. Extraordinary application of the Club Licensing System for participation in UEFA tournaments 30

3. Provisions pertaining to the criteria of acceptance of the club licensing system .................... 31

Article 14. Criteria of obtaining a licence ...................................................................................................... 31

Article 15. Refusal of the licence ................................................................................................................... 31

4. Detailed Criteria of Acceptance of the Club Licensing System................................................ 34

Article 16. Sports criteria ............................................................................................................................... 34

Article 17. Infrastructure criteria ................................................................................................................... 36

Article 18. Personnel and administrative criteria .......................................................................................... 37

Article 19/A Legal criteria .............................................................................................................................. 43

Article 19/B. Legal rules pertaining to related parties and subsidiaries ....................................................... 46

Article 20/B Rules pertaining to the Consolidated Annual Report ................................................................ 51

Article 20/C. Financial indicators and overdue debts during the year .......................................................... 51

Article 20/D Rules of future financial criteria concerning reporting obligations .......................................... 52

5. Notification obligations of clubs concerning the licence and licence application .................... 53

Article 21. Notification obligations of the Licence Applicant/Licensee ......................................................... 53

6. Rules applicable to the sanctions and disciplinary cases of the MLSZ Club Licensing System .. 54

Article 22. Rules applicable to the sanctions and disciplinary cases of the MLSZ Club Licensing System ..... 54


IV. MONITORING ........................................................................................................... 55

1. On-site inspections ................................................................................................................. 55

Article 23. Principles of the site inspections conducted by UEFA and MLSZ ................................................. 55

2. UEFA Monitoring, other monitoring requirements ................................................................... 56

Article 24. Provisions pertaining to UEFA Club Monitoring........................................................................... 56

Annex 1: Determination of the Auditor and Auditor’s assessment procedures ________________________ 59

Annex 2: Minimum disclosure requirements ___________________________________________________ 60

Annex 3: Basis for the preparation of financial statements _______________________________________ 68

Annex 4: Notion of overdue payables ________________________________________________________ 71

Annex 5: Licensor’s assessment procedures for the financial criteria and requirements ________________ 72

Annex 6: Calculation of the break-even result __________________________________________________ 78

Annex 7: Other factors to be considered in respect of the break-even requirements __________________ 89

Annex 8: Sport clubs: guide to mitigating the reporting obligations ________________________________ 91

Annex 9: Sports organisations Qualification requirements for football coaches _______________________ 92

Annex 10: Break-even and requirements pertaining to clubs taking part in UEFA tournaments __________ 95

Requirements for the break-even point ........................................................................................................ 95

Other provisions pertaining to audit ............................................................................................................. 98

Annex 11: Personal requirements of the Licensing Administration: ________________________________ 101

Annex 12: Fee payment __________________________________________________________________ 101


4 KLSZ_1/2014 (15/16) Effective from: 05.11.2014.

I. GENERAL PART

1. Reasons for and purpose of the Regulations

The purposes of the club licensing system established and operated by UEFA and MLSZ

and these Regulations are

a) to introduce standard and transparent requirements to enable the sports clubs to

satisfy the requirements of all sets of criteria (sports, infrastructure, personnel and

administrative, legal and financial) and to further promote and continuously improve

the standard of football by fulfilling those requirements

b) to improve the degree of support to football and enhance interest and commitment

to football, as well as to give continued priority to the training and care of young

players in every club;

c) to ensure that clubs have an adequate level of management and organisation,

d) to enable clubs to maintain quality-oriented youth teams, ensuring medical

supervision of the youth team and to apply the spirit of fair play both on and off the

pitch,

e) to ensure that clubs support the professional development and sports training of

their the players of the youth teams and to promote their non-professional

development and education as well,

f) to enable clubs to arrange for the employment of well trained and properly qualified

experts so that highly qualified experts should be in charge of the training of youth

teams as well,

g) to adapt clubs’ sporting infrastructure to provide players, spectators and media

representatives with suitable, well equipped and safe facilities;

h) to improve the economic and financial opportunities of clubs,

i) to ensure the continuity of taking part in international competitions to the highest

possible extent in the particular season;

j) to give continued priority to financial fair play and to handle financial criteria with

priority in the competition series also during the whole period of championships;

k) to certify compliance with entry requirements.

Furthermore, the aim of these Regulations is to achieve financial fair play in UEFA club

competitions and in competitions organised by MLSZ and, in particular:

a) to improve the economic and financial capability of the clubs, increasing their

transparency and credibility,

b) to place the necessary importance on the protection of creditors and to ensure that

clubs settle their liabilities with players, social/tax authorities and other clubs

punctually,

c) to introduce more discipline and rationality in club football

d) to encourage clubs to operate as economic organisations on the basis of their own

revenues earned in competitive activities



e) to encourage responsible spending of clubs for the long-term financial benefits

f) to protect the long-term viability and sustainability of European club football

g) all in all, to achieve a greater degree of financial stability in clubs.

In order to achieve the above objectives, the relevant clubs must certify compliance with

the required criteria by fulfilling the applicable licence criteria in a manner described in

these Regulations, and clubs must ensure continuous compliance with them.

2. Effect of the Regulations

The Club Licensing Regulations enter into force once they have been approved by the

MLSZ Presidium.

The MLSZ Club Licensing Regulations, approved by the Presidium, must be sent to UEFA

for review.

These Regulations must be applied from the date of entry into force of the procedure for

the 2015/16 season (including also the licensing procedure).

The MLSZ Club Licensing Regulations are issued in the Hungarian and English languages.

Should there be any discrepancy between the various versions, its English language

version shall prevail towards UEFA.

3. Parties covered by the Club Licensing Regulations and its scope of

application

These Regulations must be applied to sports clubs that submit a licence application or hold

a licence.

These Regulations define the rights, obligations and responsibilities of the sports clubs

falling within its scope, and therefore it especially covers:

the minimum requirements to be fulfilled by a UEFA member association in order to

act as a Licensor for its clubs, as well as the minimum procedures to be followed by

the Licensor in the assessment of the licensing criteria

the Licence Applicant and the licence required to enter the UEFA club competitions

the minimum sporting, infrastructure, personnel and administrative, legal and

financial criteria to be fulfilled by a club in order to be granted a licence as part of

the admission procedure to enter the UEFA club competitions

These Regulations also specify the rights, obligations and responsibilities of the parties

involved in the UEFA Club Monitoring Process, i.e., Monitoring (see page Article 24. 56) in

order to achieve UEFA’s financial fair play objectives and define, in particular:

the role and tasks of the Club Financial Control Body, the minimum procedures to

be followed by the Licensors in their assessments of the club monitoring

requirements and the responsibilities of the Licensees during the UEFA club

competitions

the monitoring requirements to be fulfilled by the Licensees that qualify for the

UEFA club competitions.

The UEFA licensing system applies to participation in UEFA competitions.



MLSZ applies the licensing system defined in these Regulations not only to participation in

UEFA competitions, but also as requirements of participation in the national first division

championship and the national second division championship.

If a club obtains an NB I / NB II club licence in a core licensing procedure but, based on its

results achieved in the pitch they may enter into a lower category championship than the

championship of the obtained licence, they must comply with the criteria of the division in

which they take part in the championship, regardless whether or not in the core procedure

they obtained a club licence entitling them to take part in a higher division.

If a club obtains an NB II licence but, according to its results achieved in the pitch it obtains

the right to enter a lower championship division for the next season, the obtained NB II

licence will entitle the club to take part in a lower category championship in the next season

regardless whether or not it took part in the amateur licensing procedure.



4. Structure of the Regulations and the methodology applied

1: Structure of the Regulations

The structure of the Regulations is presented in Figure 1. The contents of the

Regulations may be broken down into 5 large parts:

1. General part I: Chapter I, which contains the purpose and subject matter of the

regulations, the key concepts and definitions, used in the regulations and the

general provisions valid for the whole regulations.

2. Chapter II contains general provisions pertaining to the licensing system, the

licence, the Licence Applicant and the Licensor

3. Chapter III presents the core licensing procedure forming the core base of the

regulations and the acceptance criteria. This chapter contains the basic principles of

the core club licensing procedure, the general provisions and the process

description. Then the special rules pertaining to the UEFA tournaments are

presented.

Following the presentation of the procedure, first the acceptance criteria are

presented in general, and later in detail.

Finally, the notification of the Licence Applicant/Licensee and the disciplinary

aspects and sanctions imposed for the violation of the regulations are described in

the closing of this chapter.

4. Chapter IV contains the provisions pertaining to monitoring after the procedure.

5. Those contents are reflected in the Annex of the regulations which include the

detailed guide for the club licensing system and the club licence application and the

operational regulations.



5. Definitions

Concepts and Definitions

(1) Criteria “A”

Mandatory requirement for the Licensee / Licence Applicant. If the Licensee/Licence Applicant fails

to fulfil any “A“ criteria, it may not be licensed or the already granted licence must be withdrawn.

(2) Core Procedures

Procedures and minimum requirements defined by the Hungarian Football Association (MLSZ) for

proving compliance with the criteria stipulated in the regulations, constituting the condition for the

issuance of a licence.

(3) Employee provisions

Any form of remuneration provided by an entity / legal person in exchange for services rendered by

employees.

(4) Materiality

Omissions or misstatements of items or information are material if they could individually or

collectively influence the decisions of users taken on the basis of the information submitted by the

club. Materiality depends on the size and nature of the omission or misstatement judged in the

surrounding circumstances or context. The size or nature of the item or information, or a combination

of both, could be the determining factor.

(5) Reporting entity / legal person(s)

A registered member and/or an economic organisation or group which must provide the licensor with

financial information according to these regulations and the relevant laws.

(6) Group

A parent company and all its subsidiaries. A parent company is a party that may exert dominant

influence in another party (hereinafter: subsidiary) either directly, or through another subsidiary.

(7) Bankruptcy procedures

A procedure governed by the relevant laws and decrees, aimed at saving insolvent economic entities

and allowing them to continue their business activities. An alternative to liquidating the entity; it often

means the start of the appointment of a bankruptcy trustee who manages the daily activities of the

entity on behalf of lenders. During the asset management procedure the daily activities of the entity

are managed by the bankruptcy trustee on behalf of the creditors.

(8) Stakeholder

An entity who,

a) through one or more intermediaries, directly or indirectly

‒ controls a legal person, is controlled by it, or is jointly controlled with it (including parent

companies, subsidiaries, and other similar subsidiaries);

‒ has a significant interest that gives it significant control over the legal person; or

‒ jointly governs the legal person;

b) the entity is an affiliate of the legal person;



c) the entity is a joint venture of which the legal person is a member;

d) the entity is a member of the management of the legal person or its parent;

e) the entity is a close relative of any person listed in the above subsections;

f) the entity is a legal person directly or indirectly controlled or jointly controlled or dominantly

influenced by any person listed in subsections (d) or (e), or a significant part of the entity’s

voting shares is directly or indirectly held by any person listed in subsections (d) or (e).

(9) Parties involved

Anyone involved in the UEFA club licensing system or monitoring process, including UEFA, the

licensor, the licence applicant/licensee and any individual involved on their behalf.

(10) Independent auditor

An external auditor that is independent of the entity / legal person, pursuant to the 'IFAC Code of

Ethics for Professional Accountants'. The term “auditor” may also be used to describe services and

assurance transactions other than audit.

(11) International Financial Reporting Standards (“IFRS”)

Rules and interpretations accepted by the International Accounting Standards Board (IASB). They

include the following:

‒ International Financial Reporting Standards (“IFRS”)

‒ (b) International Accounting Standards (IAS); and

‒ (c) Interpretations defined by the International Financial Reporting Interpretations

Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

(12) International Standards on Auditing („ISA”)

Rules for reporting of historical financial information by auditors, issued by the „International Auditing

and Assurance Standards Board” (“IAASB”)

(13) International Standards on Related Services (“ISRS”)

Agreement rules issued by the „International Auditing and Assurance Standards Board”, describing

the application of the agreed procedures regarding information.

(14) International Standards on Review Engagements (“ISRE”)

Rules for the review of historical financial information, issued by the „International Auditing and

Assurance Standards Board”.

(15) Direct cost of acquiring a player’s registration

Payments to third parties for the acquisition of a player’s registration, excluding any internal

development or other costs. They include:

Transfer fee (including training compensation and solidarity contributions) payable for securing the

player’s registration;

Any charges on the transfer fee (if applicable); and

Other direct costs of obtaining the player’s registration (including fees to agents, legal costs,

remuneration paid for the training and education of youth team players pursuant to the transfer rules

of FIFA and/or Hungary’s transfer regulations, as well as other costs directly related to the transfer of

players).



(16) Dominant influence

Dominant influence can be exercised by an entity which satisfies at least one of the following conditions in relation to another entity:

a) It holds the majority of the votes of the owners (shareholders) (more than 50 per cent) alone based on the ownership ratio, or

b) holds the majority of the votes based on an agreement with other owners (shareholders) alone, or

c) as the owner (shareholder) of the company is entitled to elect or recall the majority of the executive officers or the members of the supervisory board, or

d) based on a contract concluded with the owners (shareholders) (or the provisions of the deed of

foundation) exercises dominant and other control irrespective of the ownership ratio, the voting ratio,

the right of election and recall.

(17) Event or conditions of major economic importance

Omissions or misstatements of items or information are material if they could individually or

collectively influence the decisions of users taken on the basis of the information submitted by the

club. Materiality depends on the size and nature of the omission or misstatement judged in the

surrounding circumstances or context. The size or nature of the item or information, or a combination

of both, could be the determining factor.

(18) Significant change

An event or change that would require a different presentation if it had occurred prior to submission of

the licence documentation, i.e. results in the modification of any variable data in the licence

documentation.

(19) Club

A sport association or enterprise defined in the Sports Act and participating in tournaments organised

by UEFA and in Hungarian club competitions.

(20) Club monitoring requirements

Requirements to be met by sport clubs with the right to participate in UEFA clubs‘ tournaments.

(21) Licensing Administration

An organisational unit of the Licensor responsible for club licence matters.

(22) Core Procedures

The document regulating the phases and deadlines of the various phases of the core club licensing procedure, published by the Licensing Manager prior to the beginning of the core licensing procedure.

(23 Joint venture

Contractual agreement in which two or more parties undertake to perform a jointly controlled

economic activity.

(24) Criteria

Requirements in five categories (sport, infrastructure, personnel, administrative, as well as legal and

financial), which licence applicants must meet.

(25) Subsidiary

A legal person (including unincorporated entities such as a partnership) in which the parent company



as defined in paragraph 6. may exert dominant influence. Control means the right to define a legal

person’s financial and operating policy in order to acquire the profit of the subsidiary’s activity.

(26) Facility

The venue for a competition match including, but not limited to, all surrounding properties and

facilities (for example offices, hospitality areas, press centre and accreditation centre).

(27) Licence

A certificate issued by MLSZ proving that the applicant has met all the requirements necessary for

starting the procedures of entering UEFA club competitions and/or the first or second national class.

(28) Licensor

Body that operates the club licensing system and grants licences. In Hungary, this is the Hungarian

Football Association (MLSZ).

(29) Registry of licence-related decisions

A list submitted by the licensor to the UEFA, containing amongst others information on licence

applicants who participated in the licensing procedure and have been licensed or rejected by the

national decision-making bodies. The list is compiled in the format defined by UEFA.

(30) A season subject to a licensing process

The UEFA season for which a licence applicant has applied for, i.e. June 1 – May 31.

(31) Licensed championship year

A season for which a licence has been issued (see. A season subject to a licensing process

(32) Licensee

A licence applicant that has been granted a licence by the licensor.

(33) Licence applicant

An entity / legal person fully and solely responsible for the football team participating in national and

international club competitions which applies for a licence.

(34) Quality rules

A document defining the minimum requirements that the licensor must meet to operate a club

licensing system.

(35) MLSZ Club Licensing Regulations

A work paper describing the national club licence system. It contains all the minimum requirements

in the UEFA club licence system, as well as specific national characteristics and goals.

(36) Historical financial information

Information concerning the financial impact of past events on the entity / legal person. Historical

information on financial position and performance from the time before the licensing decision.

(37) National First Class (NBI) Club Licence

A licence authorising a club to enter the highest-level Hungarian championship but does not authorise

it to participate in UEFA competitions.



(38) National Second Class (NB II) Club Licence

A licence authorising a club to enter the second-class Hungarian championship but does not

authorise it to participate in the national first-class or UEFA competitions.

(39) International (UEFA) Club Licence

Licence required to participate in international (UEFA) tournaments.

(40) Financial year

The financial reporting period ending on the statutory closing date, whether or not that is one year;

not an interim period.

(41) Registered member

Any entity / legal person pursuant to Hungary’s laws and/or the statutes of UEFA that is a member of

MLSZ.

(42) Affiliated entity

A legal person (including unincorporated legal persons such as partnerships) over which the investor

has a dominant influence, and which is not a subsidiary or member of a joint venture.

(43) Statutory closing date

The annual accounting reference date of a reporting entity / legal person.

(44) UEFA championship year

See: A season subject to a licensing process

(45) UEFA Club Licence and Financial Fair Play Regulations

A document describing UEFA’s licence and monitoring system.

(46) UEFA Club Licence system

A system consisting of criteria organised into five categories, and a set of core procedures.

(47) UEFA Club Competition

A competition organised by UEFA for clubs in Europe.

(48) UEFA Stadium Infrastructure Regulations

A document describing the requirements for stadiums to be used by clubs for UEFA tournament

matches.

(49) Management

The persons who are responsible for the preparation and reliable presentation of financial statements

and other financial information.



II. THE LICENSING SYSTEM

1. Provisions on the licence

Article 1. Principles pertaining to the Licence

(1) Principles pertaining to the Licence

a, The licence must be issued in compliance with the provisions of the effective MLSZ Club

Licensing Regulations.

b, The Licensor must invite in writing the relevant football clubs to apply for a licence. Each club

applying for a licence must submit a written application to the Licensor. In that application,

the club must express its intention to fulfil the obligations of the licensing system.

c, The Licence Applicant submits a licence application requesting the participation of the club in

the licensing procedure. The deadline for the submission of the licence application and any

other deadlines relating to the core procedure are defined by the Licensing Manager. The

consequence of failure of the submission of the licence application is regulated in Article 11.

(2) (25).

Article 2. International and national club licence and admission to club

tournaments

(1) Provisions for International (UEFA) Club Licence

Only those clubs may be granted a licence from the Licensor to participate in the UEFA club

tournaments of the subsequent season that fulfilled all mandatory minimum requirements

specified in these Regulations by the deadlines defined by UEFA and MLSZ, and have acquired or

may acquire a right to participate in the UEFA competitions of clubs based on their sports

performance or the UEFA fair play ranking.

Each club intending to participate in an UEFA tournament must possess an international (UEFA)

Club Licence pursuant to paragraph (2).

A licence for an International (UEFA) Club Licence also constitutes an application for a National

(NB I) Club Licence. In such cases, an International (UEFA) and a National First Class (NB I)

licence are issued. The validity of those two licences are independent from each other

subsequently.

If the club applying for an International (UEFA) Licence did not fulfil all mandatory minimum

requirements of an International (UEFA) Licence defined in these Regulations but has fulfilled all

mandatory minimum requirements of the National First Class (NB I) Licence defined in these

Regulations, then the club will be granted a National First Class (NB I) licence.

(2) Admission to International (UEFA) Club Tournaments

In order to participate in UEFA club tournaments, clubs must have an International (UEFA) Club

Licence issued pursuant to these Regulations. The Licensee/Licence Applicant must fulfil also all

other requirements defined in the respective UEFA regulations in order to be admitted to UEFA

club tournaments.

The admission procedure falls within the exclusive competence of UEFA and its competent bodies



(General Secretary, Committee of Club Tournaments, etc.).

The competent UEFA bodies adopt a final decision/resolution on the approval of participation of a

club in UEFA club tournaments.

The decision/resolution may be challenged by way of all legal remedy options pursuant to the

UEFA Statutes, including also the Court of Arbitration for Sport of Lausanne.

(3) Provisions Pertaining to National First and Second Division Club Licence

Only those clubs may be granted a licence from the Licensor to participate in the National First

Division or National Second Division club tournaments of the subsequent season that fulfilled all

requirements specified in these Regulations.

Clubs participating in the appropriate national championships or in international tournaments must

have National First Division (NB I), National Second Division (NB II) or International (UEFA) Club

Licence pursuant to paragraph (4).

A licence for a National First Division (NB I) Club Licence also constitutes an application for a

National Second Division (NB II) Club Licence. If the club applying for a National First Division (NB

I) Licence did not fulfil all mandatory minimum requirements of a National First Division (NB I)

Licence defined in these Regulations but has fulfilled all mandatory minimum requirements of the

National Second Division (NB II) Licence defined in these Regulations, then the club will be

granted a National Second Division (NB II) licence.

If a club possesses a National First Division (NB I) Club Licence, then it has all the rights that are

held by the clubs possessing National Second Division (NB II) Club Licence.

(4) Approval of participation in national club tournaments

Clubs intending to participate in the First Division of the championship must have a National First

Division or International (UEFA) Club Licence issued pursuant to the provisions of these

Regulations. The club must also fulfil all other requirements according to the applicable MLSZ

Regulations in order to be admitted to MLSZ club tournaments. In order to participate in the

Second Division of the championship, the club must have a National Second Division (NB II) Club

Licence issued pursuant to these Regulations.

The admission procedure falls within the exclusive competence of MLSZ and its competent

bodies.

The final decision/resolution on the participation of the club in any national club tournament is not

included in the subject matter of the Club Licensing System.

Article 3. Validity, refusal and withdrawal of the licence

(1) Provisions pertaining to the validity of the licence

A expires without prior notice

a) at the end of the season for which it was issued; or

b) in case the respective tournament system or season division is dissolved, or

c) if it is withdrawn.

(2) Provisions pertaining to the refusal of the licence

1. The licensing bodies must refuse to issue the licence and must withdraw the licence even

during the season if a winding up or liquidation procedure is filed against the club pursuant to the



definitions of the applicable national laws and regulations.

2. The licensing bodies may refuse the issue of a licence and may withdraw a licence even during

a season if:

a) the Licensee violates any of its obligations under these Regulations

b) the Licensee/Licence Applicant becomes insolvent

c) any of the conditions for the granting of the licence are no longer satisfied;

d) the Licensee/Licence Applicant requests it

e) a criminal procedure is in progress against the owner or executive officer of the club due to

any deliberate public crime. In such cases, any already granted licence may be reviewed or

withdrawn.

(3) Provisions pertaining to the withdrawal of the licence

a, As soon as a licence withdrawal is envisaged, the National Federation must inform the

UEFA Licensing Department accordingly. If the licence of the Licensee/Licence Applicant

has been withdrawn, no new application may be submitted for a new licence within the

framework of the same licensing procedure or season. If the licence of a club has been

withdrawn, the decision/resolution on the exclusion of the club from the current UEFA or

relevant national tournaments must be adopted by the UEFA Judicial Bodies or the First

Instance Body.

b, UEFA and MLSZ retain the right to sanction, or exclude from future UEFA and MLSZ

competitions a club in compliance with the provisions of the UEFA and MLSZ competition

regulations and international laws.

Article 4. Transfer of a licence

(1) Consequences of the transfer of a licence

a, The licence may not be transferred during a season.

The right to apply for a licence may be transferred in compliance with the provisions of

these Regulations Article 5.(3)(18.) and Article 4.(2)c,(17).

b, If in the course of the previous three previous calendar years either the registered member,

or an economic organisation acquiring the right to participate by way of transfer, owned by

the registered member in part or in full, or any subsidiary or related company thereof,

a) fell under liquidation; or

b) ceased to exist,

and was unable to fulfil the claims of all creditors and employees, then neither the

registered member, nor any economic organisation acquiring the right to participate by way

of transfer, owned by the registered member either in part or in full, may not apply for a

licence. If the economic organisation acquiring the right to participate by way of transfer

becomes a member of the national association, the three-year rule defined in Article

5.(3)(17.) must be applied.

(2) Economic organisation acquiring the right to participate by way of transfer

a, If the international (UEFA) Licence Applicant or international (UEFA) Licensee is an

economic organisation acquiring the right to participate by way of transfer, it must also

present the Licensor the financial information of the company and the registered member



(i.e., combined or consolidated financial statements must be presented as if the legal

entities involved in the consolidated formed one single company). The Licensee/Licence

Applicant is especially responsible for ensuring the following:

1. each player must be registered by MLSZ and each professional player must have a

written employment contract with the registered member or the economic

organisation acquiring the right to participate by way of transfer (see: FIFA

Regulations on the Status and Transfer of Players, - hereinafter: FIFA Transfer

Regulations - Chapters 2 and 5);

2. all amounts paid out to the players pursuant to contractual and legal obligations and

all revenues from the sale of tickets are entered into the books of either the

registered member or the economic organisation acquiring the right to participate by

way of transfer;

3. the Licence Applicant has full liability with regard to the football team of registered

players taking part in national and international championships;

4. and supply to the Licensor of the following:

- all required information and/or respective documents that certify compliance

with the licensing requirements,

- all other documents concerning decision making

- all information relating to the legal entity/entities preparing the reports, with

regard to which sports infrastructure, personal and administrative legal and

financial information needs to be supplied;

5. reporting to the Licensor all events occurring after the submission of the licensing

documentation and resulting in any major change in any previously submitted

information (see the last paragraph of “Reasons for and purpose of the Regulations”

5).

b, The registered member or economic organisation acquiring the right to participate by

way of transfer must ensure the following, through a written agreement:

1. The economic organisation acquiring the right to participate by way of transfer must

comply with the currently effective decisions, resolutions and regulations of the

National Federation, as well as the UEFA and FIFA. Those regulations must be

integrated parts of the agreement. Such companies must also comply with the

decisions of the football bodies referred to above.

2. An economic organisation acquiring the right to participate by way of transfer may

not further assign any national or international right to participate.

3. The right to participate in a competition of the economic organisation acquiring the

right to participate by way of transfer ceases if the membership of the registered

member is terminated in the federation, unless the economic organisation acquiring

the right to participate by way of transfer is also a member on its own right.

4. If the economic organisation acquiring the right to participate by way of transfer

goes bankrupt or is subject to liquidation or winding up, then its right to apply for a

licence to participate in an international and/or national club tournament is not

returned to the registered member. If the licence has already been issued to the

company, it may not be transferred from the company to the registered member.

5. MLSZ must approve the name on which the economic organisation acquiring the

right to participate by way of transfer takes part in international tournaments.



6. If requested by a competent national or international arbitration court, the registered

member or the economic organisation acquiring the right to participate by way of

transfer must allow access to information and documentation with regard to matters

concerning participation in international and/or national tournaments.

7. Confirmation of the fact that the registered member holds part of the voting rights in

the economic organisation acquiring the right to participate by way of transfer. The

economic organisation acquiring the right to participate by way of transfer may not

be owned (either directly or indirectly) by any party who has dominant influence in

another registered member or company having the right to participate in the

competition of the federation league/tournament system at the same level.

8. The national federation must approve the agreement or any modification thereof

before it can become effective.

9. The Licence Applicant must explain in detail if it has withdrawn any economic

organisation involved in its organisational structure from the scope of reporting.

c, If the Licensee/Licence Applicant is an economic organisation acquiring the right to

participate by way of transfer,

1. it is obliged to provide the Licensor with all information concerning the fulfilment of

the obligations with regard to both the registered member and the economic

organisation entitled to participate by way of transfer;

2. is obliged to fulfil all legal and financial obligations both with regard to the registered

member and the economic organisation acquiring the right to participate by way of

transfer (with the exception of the F.06 obligation). In that respect, an obligation is

fulfilled by both the registered member and the economic organisation acquiring the

right to participate by way of transfer.

3. the Licensor must assess the registered member and the economic organisation

acquiring the right to participate by way of transfer as if they formed one single

unit/legal entity with regard to the sports personnel, administrative infrastructure and

F.06 obligations. In that respect, an obligation is fulfilled even if it is fulfilled either by

the registered member or the economic organisation acquiring the right to

participate by way of transfer.

2. Provisions pertaining to the licence applicant

Article 5.The Licence Applicant

(1) Definition of the Licence Applicant

This chapter defines the club that must apply for a licence for participating in the competition of the

MLSZ first or second division and in UEFA club competitions.

Clubs applying for a licence are referred as club applicants. As soon as the Licensor issues the

licence, the Licence Applicant becomes a Licensee.

(2) Licence applicants

a, The Licensor defines the Licence Applicants in compliance with the MLSZ Statutes and

other regulations, as well as other regulations listed below, in compliance with the national

regulations. In addition, the FIFA and UEFA Statutes and applicable regulations must also

be complied with.



b, Pursuant to the 55/2003 resolution of the MLSZ Presidium adopted on 25 April 2003, from the 2004-2005 season the Presidium sets a requirement to the clubs taking part in the first national division (NB I) to obtain a club licence as a mandatory entry requirement in NB I. The Licensor sets a requirement for the clubs to obtain a licence required for participation in the national second division as a mandatory entry requirement from 2011-12.

c, The Club Licensing System must be applied to all clubs that has obtained a right to participate in the highest national or second national division, or in a UEFA tournament. Depending on the acquisition of the licence, clubs may obtain a right to take part in NB I or NB II and/or the UEFA tournaments based on their sports performance.

d, The Club Licensing System does not need to be extended to clubs operating in lower divisions that acquired a right to take part in a UEFA tournament based on their sports

performance in the Hungarian Cup with the exception of Article 13. (30.) of the Regulations, which pertains to the extraordinary application of the club licensing system in the case of participation in UEFA club tournaments.

e, A licence granted by the Licensor in a manner and under the conditions defined in these Regulations is a prerequisite of participation of a member club in any UEFA tournament or in NB I or NB II.

(3) Legal form of Licence applicants

a, The club must have its registered seat in Hungary.

b, The legal form of clubs applying for a licence must be an economic organisation defined in

accordance with the MLSZ Competition Regulations and Tournament Specifications. That

must be specified in a Deed of Association, Statutes or Deed of Foundation, effective

pursuant to the national regulations.

c, UEFA and NB I

The Licensee/Licence Applicant is defined as a legal entity assuming full liability for the

football team participating in national and/or international club tournaments which, with

regard to NB I and UEFA, is either:

a legal entity that has been a MLSZ member for at least three consecutive years at the

start of the licence season (hereinafter in this chapter registered member), or

an economic organisation (hereinafter in this chapter: an economic organisation acquiring

the right of participation by way of transfer) which was founded by a registered member

for the purposes of participating in the tournament, and to which the registered member

lawfully transferred the right of participation in compliance with the provisions of the

MLSZ Competition Regulations and the Act on Sports (Act I of 2004) within the previous

three years. The registered member is liable for the obligations of the economic

organisation acquiring the right to participate by way of transfer in disciplinary matters

and as a guarantor for three consecutive years from the transfer of the right to participate.

An economic organisation that complies with the “three years’ rule”. According to the

“three years’ rule”, the registered MLSZ membership must prevail at least for three years

starting from the competition year for which the licence requested. Any alteration to the

club’s legal form or company structure (including, for example, changing its headquarters,

name or club colours, or transferring stakeholdings between different clubs) during this

period in order to facilitate its qualification on sporting merit and/or its receipt of a licence

to the detriment of the integrity of a competition is deemed as an interruption of

membership or contractual relationship (if any) within the meaning of this provision.

If the Licence Applicant/Licensee is an economic organisation acquiring the right to



participate by way of transfer, it must supply to the Licensor all information defined in these

Regulations both for the company and the registered member.

UEFA (MLSZ) may grant exemption from the above ‘three-year rule’ with regard to

international (national first division) licence applications.

d, NB II

The Licensee/Licence Applicant is defined as a legal entity assuming full liability for the

football team participating in national and/or international club tournaments which, in the

case of NB II, is a legal entity that is an MLSZ member (i.e., a registered member):

e, The exception rule, NB II and lower divisions

The provision in paragraph b) does not apply to non-first or second division clubs either which have qualified for UEFA tournaments.

3. Provisions pertaining to the Licensor

Article 6.The Licensor

(1) General provisions relating to the Licensor

a, The Licensor is the Hungarian Football Federation (MLSZ).

b, The Licensor governs the club licensing system, appoints the respective decision-making

bodies and establishes the required procedures. In addition, the Licensor may also check

regular compliance with the requirements.

c, The Licensor assumes full confidentiality towards the Licensee/Licence Applicant with regard

to any information provided by the Licensee/Licence Applicant during the licensing

procedure but the confidentiality may not be contrary to the provisions of Act CLXXV of 2011

on non-profit organisations requiring/guaranteeing the publicity of operation or the data

protection regulations governing the protection of business secret. Any individual involved in

the licensing procedure or appointed by the Licensor must sign a confidentiality declaration

prior to beginning to perform any task.

d, The Licensor must establish adequate administration and appoint duly trained employees for

it.

e, The Licensor must establish the following two decision-making bodies:

‒ First Instance Committee

‒ The Appeals Committee

f, The decision making bodies are independent from each other. They must receive

administrative support from the Licensor’s administration, which equals the Club Licensing

Manager and the Club Licensing Administration. The bodies may establish their own Rules

of Procedure in compliance with the respective provisions of these Regulations, as well as

any other required regulations and instructions.

(2) Authoritative provisions relating to the Licensor

a, In order to implement the club licensing system in each UEFA member association, the

statutes of each association/federation must specify a legal basis that defines the purpose of

the system and the respective competences with references to other, more detailed



regulations.

b, Pursuant to Article 3 (10) of the Statutes of the Hungarian Football Federation, the MLSZ

members take part in international club tournaments organised by UEFA in compliance with

the provisions of the UEFA club licensing system. Pursuant to Article 3(11) MLSZ ensures

that the club licence required for tournaments organised by UEFA or MLSZ is assessed in a

two-level procedure.

c, Pursuant to Article 22 (4) (g) of the Statutes of the Hungarian Football Federation, the

approval and amendment of all regulations pertaining to the operation of MLSZ, the

organisation and management of football and the submission thereof to FIFA and/or UEFA

for approval, are the tasks and responsibilities of the Presidium.

d, The MLSZ Presidium entered into force the MLSZ Club Licensing Regulations based on its

resolution. Any modification or supplementation of the club licensing system must be

communicated to the teams on the MLSZ website online, or at mlsz.info and/or via email,

and they enter into force immediately. Disclosure on any online facility (mlsz.info) and/or via

e-mail or on the MLSZ website is also considered official delivery.

Article 7. Provisions pertaining to administration

(1) General Provisions Pertaining to Club Licence Administration

a, Tasks of the Licensing Administration (hereinafter: LA):

‒ preparing, implementing and further developing the club licensing system;

‒ providing administrative support to the decision-making bodies;

‒ assisting, advising and monitoring the Licensee/Licence Applicant during the season;

‒ serving as the contact point for, and sharing expertise with, the licensing

departments of other UEFA member associations and with UEFA itself;

‒ controlling, site inspecting and monitoring of the Licensee/Licence Applicant to

conclude whether or not it always fulfils the requirements of these Regulations.

b, The Licensing Administration must be provided adequate staff, the required infrastructure

and budget. The costs are covered by the Licensor. The personal requirements are listed in

Annex 11.

c, At least one employee of the Licensing System or an external financial advisor must be a

qualified and certified auditor or a chartered accountant.

d, All parties taking part in the licensing procedures must comply with strict confidentiality

regulations concerning any information obtained during the licensing procedure.

(2) Licensing Manager

a, The Licensing Manager performs all tasks in compliance with the MLSZ Statutes and other

regulations, especially in compliance with the Club Licensing Regulations, the catalogue of

sanctions and procedural rules of the decision-making process in the licensing procedure.

The Licensing Manager is subject to the rules of confidentiality.

b, Tasks of the Licensing Manager (hereinafter: LM):

‒ Keeping and co-ordinating the daily operation of the Club Licensing Administration;

‒ preparing, implementing and developing the club licensing system;



‒ supporting and monitoring the Licensee/Licence Applicant in the licensing procedure

and during the season and conducting site inspections to verify that the

Licensee/Licence Applicant always complies with the criteria of these Regulations

‒ introducing and operating the ‘best practice’ methods, establishing an effective

management structure;

‒ implementing the UEFA Standards applicable to the Club Licensing System;

‒ representing MLSZ at club licensing meetings, discussions and conferences;

‒ planning and managing the training system for the employees of the Club Licensing

System (Club Licensing Administration and decision-making bodies) and for the

Licensee/Licence Applicant

‒ defining the procedures of the Club Licensing System (especially internal and

external administration, Club Licensing Administration and decision-making bodies),

and the documents and templates used in the Club Licensing System, in compliance

with the rules of these Regulations and the UEFA Club Licensing Standard

‒ preparing the budget of the Club Licensing Administration, the decision-making

bodies and the training system of the Club Licensing System.

Article 8. Provisions pertaining to decision making bodies

(1) The First Instance Committee

a, The First Instance Committee decides on the granting, refusal, withdrawal of a licence to a

particular Licensee/Licence Applicant, on supplementation or evaluation of the documents

required by the Licensor and submitted by the respective deadline pursuant to the provisions

of these Regulations, and on the sanctions applicable in the licensing system. If at its first

meeting the Committee sets an obligation to the Licensee to supplement the documentation,

then the body may issue a supplementation resolution and oblige the Licence Applicant to

pay a supplementation fee pursuant to fee payment procedure stated in the regulations in

case it intends to continue the licensing procedure by performing the supplementation

obligation. The Committee decides on the need for any fee payment within its own

competence, in compliance with the basic principle that no fee is applied in case new

information and/or documents is/are requested compared to the data requested and

submitted by the Licensee in two supplementation rounds within the core licensing

procedure.

The Committee may also request supplementary documents from the clubs and may decide

on the evaluation of those documents during the core procedure and at any other time.

b, The body is independent. Its members are bound to only the MLSZ rules and regulations,

the Club Licensing Regulations, the Catalogue of Sanctions, the procedural rules of the

decision-making processes and their own conscience. The members are subject to the rules

of confidentiality.

c, The MLSZ Presidium decides on the composition of the body and appoints (and may recall)

its members and chairman.

d, The body consists of 5-9 members and has a quorum if at least 50% of the members are

present, of whom one member must be the chairman or deputy chairman. In case of a tied

vote, the chairman, or if he is absent, then the deputy chairman chairing the meeting,

decides on all issues in relation to which the tied vote prevails. The meetings of the body are



called by the chairman or, if he is hindered, by the deputy chairman.

(2) The Appeals Committee

a, The Appeals Committee adopts final resolutions on appeals submitted in writing against any

resolution/decision of the First Instance Committee, as a result of which a licence may be

granted or withdrawn.

b, The body is independent. Its members are found to only the MLSZ Statues and regulations,

the applicable Club Licensing Regulations, the Catalogue of Sanctions, disciplinary rules and

the procedural rules of its decision-making process. The members are subject to the rules of

confidentiality.

c, The MLSZ Presidium decides on the composition of the body and appoints (and may recall)

its members and chairman.

d, The body consists of 5-9 members and has a quorum if at least 50% of the members are

present, of whom one member must be the chairman or deputy chairman. In case of a tied

vote, the chairman, or if he is absent, then the deputy chairman chairing the meeting,

decides on all issues in relation to which the tied vote prevails. The meetings of the body are

called by the chairman or, if he is hindered, by the deputy chairman.

Article 9. Requirements for the members of the decision-making bodies

(1) Conflict of interests

a, The members of the decision-making bodies must be independent and must act impartially in

the performance of their duties.

b, Each member and the chairman of the decision-making bodies must be independent, i.e.,

they, or any of their relatives defined in the Civil Code may not be simultaneously a

‒ member;

‒ shareholder;

‒ business partner;

‒ supporter; or

‒ advisor

of any other Licensee/Licence Applicant, licensing administration or any other

body/committee of the Licensor (Disciplinary, Competition and Appeals) having its

independent competence.

c, Each member must refrain from participation in the procedure if their independence is

infringed or if there is any other conflict of interest.

d, Any decision on the infringement of the independence of any member falls within the

competence of

a. the chairman of the body with regard to members of the bodies (other than the

chairman);

b. the chairman of the Appeals Committee with regard to the Chairman of the First

Instance Committee

c. the Legal Committee with regard to the chairman of the Appeals Committee.

If it is concluded that any of the reasons of exclusion defined in paragraph c) applies to any



member of the bodies, then the authorised bodies and individuals listed in paragraphs a), b)

and c) of this Article must exclude the respective member from the particular procedure. The

body or individual making a decision on the exclusion must report it to the MLSZ General

Secretary immediately.

(2) Further rules pertaining to decision making bodies

a, There must be at least one lawyer and one certified auditor among the members of both

decision-making bodies.

b, The members are elected for a term of five years and they may also be re-elected.

c, The members of the decision-making bodies must adhere to strict confidentiality rules. The

Licensing Manager defines those rules and the members must accept them in writing.

III. CORE CLUB LICENSING PROCEDURE AND CRITERIA OF ACCEPTANCE

1. Core Club Licensing Procedure

Article 10. Principles of the Core Club Licensing Procedure

(1) Right to equal treatment and fair procedure

The parties are granted fundamental procedural rights, including especially the right to equal

treatment and fair procedure, including also the right to produce/search for evidence and

involvement therein, and the right to a resolution/decision with sufficient reasoning.

(2) Official language

Unless these Regulations provide otherwise, the official language of the licensing procedure is the

Hungarian language. If, due to any reason, part of, or the total, documentation was written in any

language other than the Hungarian language, the club must also provide not only the original

documents, but also the official transactions thereof. In addition, all communication addressed to

the Licensor must be made in the Hungarian language. Nonetheless, whenever a club needs to

turn to UEFA, the communication must be prepared in one of the official languages of UEFA.

(3) Deadline for issuing summons or communication

Any summons or communication relating to the licensing procedure must be sent out by making

sure that the respective party receives it three days prior to the procedural act or that it is published

three days prior to the procedural act.

(4) Representation

A club may be represented or employ experts.

(5) Right to be heard

The Licensee/Licence Applicant has no subjective right to be heard. The decision-making bodies

may decide to invite the Licensee/Licence Applicant to a hearing. In such cases, the notification

must be sent out at least three working days prior to the hearing.

(6) Consultation



The consultations and hearings are not public events, unless the respective decision-making body

decides to make them public.

(7) Burden of proof

The burden of proof lies with the Licensee/Licence Applicant. By submitting the documentation and

information required by the UEFA Licensing Department, the licensing bodies or the Licensing

Manager, the Licensee/Licence Applicant must prove compliance with all criteria defined in these

Regulations for the licence.

(8) Nature of the required evidence

The Licensor must make all decisions based on the received documents. The club must complete

its application and submit it to the Licensing Manager with all the documentations required under

these Regulations. The application and all attached mandatory documents may be sent by post,

fax, via internet or in any other way agreed between the club and the Licensing Manager. If the

Licensing Administration requests it at any time, all documents specified in the parts above must be

submitted in original copies, or in sufficiently attested copies. The Licensing Manager or his

authorised representative may request supplementary information from clubs in relation to any

matter and may also request any supplementary interpretative or other supporting documents or

visit the facility for further assessment and for ascertaining in person that all requirements have

been fulfilled and that the information is reliable and true.

Article 11. Provisions pertaining to the Core Club Licensing Procedure

(1) Core licensing process

a, In the course of the core licensing process, the licence applications submitted by Licence

Applicants are assessed and the licence to clubs falling within the scope of these regulations

is granted or refused, with the exception of the extraordinary procedure.

The core licensing process must be certified against the Club Licensing Quality Standard in

compliance with the UEFA requirements on an annual basis by an independent certification

body.

b, The purpose of the core licensing process is to

‒ assist the Licensor in developing an effective licensing procedure in line with its

requirements and organisation;

‒ agree upon the main requirements that the Licensor must comply with in order to

grant licences to clubs required for participation in UEFA and national competitions;

‒ ensure that the decision/resolution on the issue of club licences is made by an

independent body (First Instance Committee or Appeals Committee);

‒ ensure that the decision-making bodies and Licence Applicants/Licensees receive

adequate support from Club Licensing Administration and the Licensing Manager;

‒ ensure that the Licensor receives all required information and assesses the licence

application

c, The Licensing Manager describes the core licensing process and its schedule in the “Core

Club Licensing Procedure Schedule” (hereinafter “Schedule”) prior to the start of the

licensing process.

The Licensing Manager defines the templates and documents to be used for the verification



of compliance with the obligations of these Regulations, as well as the site inspections and

deadlines to be applied during the core licensing process and in the course of monitoring

and control after the issue of the licence in compliance with the provisions of these

Regulations.

d, No alteration of the deadline relating to the core licensing process will constitute any reason

for objection or appeal to be submitted by the Licence Applicant, providing that the alteration

of the deadline did not reduce significantly the time available for the Licence Applicant for

any action relating to the core process, unless the Licensor submitted the list of Licensees

late, after the deadline specified by UEFA.

e, In the course of the core licensing process and monitoring period, each uploaded document

must be duly signed by the official representative of the club in order to certify the

authenticity of the data entered into the online database.

From the 2014-15 season, both UEFA and the National First and Second Division clubs may

submit their applications and the full documentation only through the mlsz.info online

system.

(2) Deadlines

a) The deadlines of the decision-making procedures are defined in the schedule prepared by the

Licensing Manager prior to the core procedure.

b) The failure of complying with the deadline for the submission of the licence application shall

constitute forfeiture.

c) The failure of complying with the deadline for supplementation defined at the meeting of the

First Instance Committee shall constitute forfeiture.

d) The licensing fee is payable by no later than the 10th working day prior to the first meeting of

the First Instance Body. Missing the deadline shall cause legal rights to lapse.

e) The failure of complying with the deadline for the payment of the supplementation fee in the

core procedure shall constitute forfeiture.

f) The missing of any other deadline defined in these regulations or referred to indirectly shall

not constitute forfeiture.

(3) Resolution

The First Instance Committee and the Appeals Committee must issue written decisions containing

the following information:

‒ the name of the proceeding body;

‒ the operative part and any separate facts and legal reasoning;

‒ information on potential appeal and the conditions of submission thereof;

‒ the place and date of the issue.

(4) Resolution

Based on the Club Licensing Regulations the following shall constitute delivery in any

communication between the Licensor and the Licensee/Licence Applicant and/or the licence

applicant as specified below:

‒ the members of staff of Club Licensing Administration upload into the mlsz.info system,

used by the Licensee/Licence Applicant during the licensing procedure, the resolution of



o First Instance Committee;

o the Appeals Committee;

o Any other committee operating within MLSZ

‒ adopted in relation to the Licensee/Licence Applicant and then the Licence Applicant learns

about the uploaded information from e-mail messages sent automatically to the e-mail

addresses of the

‒ authorised company signatory(ies);

‒ liaison officer(s);

generated by mlsz.info and registered there by the licence applicant/licensee.

‒ The license applicant/Licensee shall review the uploaded resolution no later than on the

2nd working day after it is uploaded, in relation to which mlsz.info provides an automatic

confirmation to club licensing administration.

‒ If the Licence Applicant/Licensee does not view the resolution by the end of the 2nd

working day from uploading, Club Licensing Administration will send it by post to the

registered seat of the Licence Applicant/Licensee specified in the procedure, or shall

deliver it in person to the Licence Applicant/Licensee.

‒ Any item delivered by post to the registered seat of the Licence Applicant/Licensee by Club

Licensing Administration shall be deemed delivered on the 5th working day after posting

even if it is returned to Club Licensing Administration without being undelivered for any

reason.

(5) Provisions Pertaining to Commenting

The Licensee/Licence Applicant may comment if it feels that any resolution/decision or action of the

Licensing Manager, the First Instance Committee or the Appeals Committee is unfounded or is

contrary to the rules laid down in these Regulations.

(6) Provisions on appeal

a, An appeal may be lodged against any decision on the issue, refusal or withdrawal of a

licence or any other resolution of the First Instance Committee in a manner defined in these

Regulations, with the exception of resolutions/decisions adopted on supplementation.

b, The following parties may lodge an appeal:

‒ the Licence Applicant governed by the decision of refusal or any other resolution of

the First Instance Committee,

‒ the Licensee, whose licence has been withdrawn by the First Instance Committee or

with regard to whom any other decision was made by the same committee,

‒ the Secretary General of the Licensor (on behalf of the Licensor)

c, The Appeals Committee may decide

‒ to confirm the resolution of the first instance; or

‒ alter the resolution of the first instance.

d, The resolution of the Appeals Committee is effective.

e, The Appeals Committee adopts its resolution/decision based on the decision/resolution of

the First Instance Committee, and the documents and evidence submitted by the

Licensee/Licence Applicant in the first instance procedure and the written appeal, and those



submitted by the Licensing Manager.

f, No evidence can be added or new evidence may be submitted in the appeal procedure, with

the exception of cases when the Licensee/Licence Applicant presents information or

evidence to the Appeals Committee in the second instance procedure which was already

available at the time of the first instance procedure, but the Licensee/Licence Applicant was

not aware thereof due to any reason not attributable to it.

The payment of the appeal fee is an exception from the Article referred to above.

g, The deadline of the appeal is defined in the core licensing procedure. In any other case (i.e.,

other than the core licensing procedure) the appeal deadline is eight days from receiving the

respective resolution/decision, which does not include the date of receipt.

(7) Legal effects of comments, appeal and extraordinary legal remedy requests

‒ Comments against any decision/resolution of the First Instance Committee concerning

supplementation do not have any suspensive effect.

‒ Any appeal against any other decision/resolution of the First Instance Committee has a

suspensive effect.

‒ Comments against any decision/resolution of the Appeals Committee, or extraordinary legal

remedy requests, have no suspensive effect.

(8) Content and format of the appeal

a, The appeal must be addressed to the Appeals Committee and submitted to the Licensing

Manager in a written document (hereinafter: appeal), containing at least the following

information:

‒ facts and the legal basis constituting the appellant’s case;

‒ adequate documentation and/or information supporting the appeal in compliance

with Article Article 11.(6) f,(27.)

b, The Licensee/Licence Applicant intending to submit an appeal must pay the appeal fee

defined in the fee payment procedure associated with the regulations.

c, The submission of an appeal via e-mail shall also be considered official submission of the

appeal, providing that it is send to the Licensing Manager and is addressed to the Appeals

Committee.

(9) Provisions pertaining to extraordinary legal remedy

a, All individuals and organisations involved in the licensing procedure must comply with the

provisions of these Regulations, the MLSZ and UEFA statutes and other regulations.

b, Right of the Presidium to conduct compliance reviews

Pursuant to Article 22 (4) b) of the MLSZ Statutes, the Presidium is obliged to and has

competence for complying with, and enforcing, the legal regulations, ensuring operation in

compliance with the Statutes, and regulating the revocation of any different effective

decisions and the orders for new procedures in various regulations.

In view of the statutes, the MLSZ Presidium revokes any effective decision that violates the

law, does not comply with the MLSZ Regulations or that lacks a solid basis and orders a

new procedure.



(10) Appeal against UEFA resolutions

The UEFA resolutions may be appealed against in compliance with the respective provisions of the

UEFA Regulations.

Article 12. Core Club Licensing Procedure and Process Description

Figure 2.: Core licensing process

Core licensing procedure

Clu

b L

ice

nce

A

dm

inis

trat

ion

Lice

nse

e/L

ice

nce

A

pp

lican

tFi

rst

Inst

ance

Co

mm

itte

eA

pp

eal

s C

om

mit

tee

11.Second

instance

resolution

9. Appeal and

fee payment

8.a First

instance

resolution

granting

licence

10.Control

2. Submission of

the application and

payment of the

procedural fee

3. Control of the

application

7.Licence May

be granted?

Yes

8.b First instance

resolution refusing licence

No

1. Invitation to

launch a club

licensing

application period

4. Assessment of

the application

5.

Supplementatio

n required?

Yes

6.

Supplementation

and payment of

the

supplementation

fee

No

(1) Invitation to launch a club licensing application period

The Licensing Manager informs the Licence Applicant clubs in writing of the launch of the core

licensing procedure and of the related deadlines simultaneously with the distribution of the

schedule.

(2) Submission of the application and payment of the procedural fee

a, Electronically

The Licence Applicant shall submit to the Licensor the licence application authenticated by

the authorised signatory of the club on mlsz.info by the deadline specified in the schedule

issued by the LM. The failure to submit the licence application within the deadline shall lead

to exclusion from further phases of the licensing procedure.

b, On paper

UEFA/NB I, NB I and NB II Licence Applicants shall submit the documents required in hard

copy in the Club Licensing Administration Office at an arranged time and shall receive

feedback of any missing document.

c, The Licensee/Licence Applicant must pay a procedural fee following the submission of the licence application, within eight days from receiving the invoice. The procedural and other fees are contained in the Fee Payment Procedure which relates to the regulations. The obligation to pay a fee occurs simultaneously with the submission of the application and the fee remains payable even if the application is withdrawn or rejected. Exceptions include when the Licence Applicant club

- applied for a licence in the national second division,



- is included in the national third division football championships at the time of the submission of the application,

- indicates, by not later than the 2nd supplementation deadline specified in the core procedure that from now on it does not intend to take part in the core club licensing procedure.

If the Licence Applicant fails to pay the procedural fee within the deadline (not later than 10 working day prior to the First Instance Committee meeting), the Committee will reject the licence application without any assessment.

(3) Control of the Application

Club Licensing Administration and the designated experts of certain criteria shall check the

applications in terms of format and content during the period specified in the schedule and provide

written feedback to the Licence Applicant of the result within the deadline specified in the schedule.

(4-8) Procedure for the First Instance Resolution

Granting or refusal of licence applications or, when required, the definition of the 3rd

supplementation obligation fall within the scope of competence of the First Instance Committee.

After the closing of the supplementation period for contents (2nd period), the First Instance

Committee decides on the licence applications at its first meeting, as a result of which it may grant

the requested licence, requests supplementation or may refuse the application. The First Instance

Committee may set another supplementation obligation for those Licence Applicants that do not

comply with the terms and conditions of these regulations at the time of the first meeting of the First

Instance Committee and may instruct the Licence Applicant to pay the supplementation fee. After

the (3rd) supplementation deadline, the Committee will have a second meeting and decide, by

taking into account the supplementation satisfying the requirements, to grant or reject the requested

licence. The Committee cannot take into account documents received after the 3rd supplementation

deadline. If the Committee obliges the club to submit supplementation and to pay supplementation

fee, then supplementation may be accepted in the second meeting of the Committee only if the

supplementation fee was paid within the deadline.

(9-11) Procedure for the Second Instance Resolution

The Licence Applicant may lodge an appeal against the decision of the First Instance Committee in

writing and submit it the Licensing Manager within the required deadline (Schedule, Club Licensing

Procedure (24.))

Any Licensee/Licence Applicant lodging an appeal must pay an appeal fee by the appeal deadline.

The appeal fee is defined in the fee payment procedure stated in the regulations. The appeal must

be rejected if the appeal fee is not paid by the appeal deadline. The obligation to pay an appeal fee

occurs simultaneously with the submission of the appeal and the fee remains payable even if the

appeal is withdrawn or rejected. The appeal fee must be returned, unless

the Appeals Committee rejects the appeal, or

if the procedural fee is paid after the decision of the First Instance Committee.

The assessment of the appeals falls within the competence of the Appeals Committee, whose

decision is legally effective and definitive, which cannot be appealed against.



2. Extraordinary rules of the Club Licensing System pertaining to UEFA

Tournaments

Article 13. Extraordinary application of the Club Licensing System for

participation in UEFA tournaments

(1) Basic Principles

a, If a club acquires the right to take part in an UEFA tournament based on its sports results but

did not take part in any licensing procedure, or falls within the scope of a licensing procedure

which is lower than/not equivalent with the requirements of UEFA tournaments, then the

National Association of the relevant club may, in the name of the club, request the

extraordinary application of the licensing system in compliance with Annex IV of the UEFA

Club Licensing and Financial Fair Play Regulations.

b, Pursuant to such extraordinary application, UEFA may grant an individual licence to the

applicant to take part in the respective UEFA club tournament in the respective season.

(2) Rules pertaining to UEFA procedures

a, UEFA Administration defines the minimum requirements of the extraordinary procedure and

publishes them to the National Associations not later than by 31 August of the year

preceding the season affected by the licence.

b, The relevant national association must notify UEFA in writing by not later than the deadline

stated by UEFA with regard to any such extraordinary application, by indicating the name(s)

of the relevant club(s).

c, The UEFA Administration may increase the minimum requirements of the relevant clubs by

taking into account the requirements of the respective national Club Licensing Regulations

and the status(es) of the respective club(s). UEFA Administration defines the deadlines of

the required procedures and sends them to the relevant National Federation.

d, The relevant National Federation is responsible for forwarding the obligations to the club(s)

involved in the evaluation of the extraordinary procedure at national level following the

disclosure of the obligations by UEFA Administration. The association must also take

immediate steps for preparing for such procedure together with the club.

e, The relevant club(s) is/are obliged to present the required documentary evidence to the

National Federation. The Licensor will assess the club(s) according to the established

minimum standards and will transfer to UEFA the following documents in one of the official

UEFA languages by the specific deadline:

‒ written application for the special licensing of participation in the respective UEFA

club tournament;

‒ licensor’s recommendation based on its own assessment (containing the names of

the individuals assessing the club(s) and the date of assessment);

‒ all documentary evidence provided by the Licensor and the club(s); and

‒ any further document requested by UEFA in the extraordinary procedure.

f, UEFA adopts its decision on the basis of the received documents and grants a special

licence to the club for participating in the UEFA tournament if the club fulfilled all the

obligations and acquired a right to participate also based on its sports results. UEFA informs



the National Federation of its decision and the National Federation transfers it to the club.

UEFA and its appointed bodies/representatives retain the right to conduct site inspections.

g, If a relevant club is excluded in such an extraordinary procedure based on sports

performance, then the National Federation must immediately notify UEFA about it and the

procedure will be terminated immediately. Such terminated procedures may not be

requested to be reopened in a subsequent phase.

(3) Admission to UEFA tournaments of clubs by way of the UEFA Fair Play

Competition

If a club acquires the right to take part in an UEFA club tournament through the UEFA Fair Play

Competition, then it must fulfil all the minimum requirements of the accredited MLSZ (UEFA) Club

Licensing Regulations in order to take part in the UEFA tournaments. The International (UEFA)

Club Licence issued by the National Federation is a requirement for such clubs.

3. Provisions pertaining to the criteria of acceptance of the club licensing

system

Article 14. Criteria of obtaining a licence

(1) Criteria

a, If the Licensee/Licence Applicant fails to fulfil any “A“ criteria, it shall not receive the license or the already granted licence must be withdrawn.

b, The evaluation methods are defined by the Hungarian Football Federation with the exception of those that are used for checking compliance with the financial criteria and for which the special evaluation procedures described in Article 20/C. must be applied.

Article 15. Refusal of the licence

(1) Refusal of the licence

b, The licence cannot be granted based on F.01 Annual Report, Financial Criteria

‒ if the Licensee fails to prevent the annual financial statement(s) to MLSZ within the

specific deadline;

‒ if the Audit Report contains an auditor statement refusing to issue an audit opinion or a

qualified opinion;

‒ if the Licensee/Licence Applicant submits annual financial statements that do not

comply with the minimum requirements of the law or these Regulations in terms of

content or accounting;

‒ if the audited annual financial statements of the Licensee/Licence Applicant prepared in

compliance with Annex 3. shows negative equity in two subsequent years, unless the

Licensee/Licence Applicant has met the obligations specified in Act IV of 2006 on

economic associations or Act V. of 2013 on the Civil Code in the meantime.

c, Further potential decisions with regard to qualified Audit Reports:

The licence cannot be granted based on F.01 Annual Report, Financial Criteria

‒ if the Audit Report contains a remark or a qualified opinion, then the Licensor must take

into account the consequences of the remark or the opinion based on which the club



licence may be rejected;

‒ if the Licensee/Licence Applicant submits supplementary information(F.01 (47.)), the

Licensor assesses the meaning of the agreed upon procedures conducted by the

auditor in relation to the supplementary information. If the audit report contains any

reference to errors and exceptions in relation to the agreed investigation, the licence

may be rejected.

e, The licence cannot be granted based on F.02 Annual Report, Financial Criteria

‒ if the Licensee/Licence Applicant submits information that does not comply with the

minimum disclosure requirements;

The licence cannot be granted based on F.03 No overdue payables towards football

clubs criterion

‒ if no information is submitted to the Licensor with regard to payables from transfer

activities;

‒ If the Licensee/Licence Applicant has overdue payables to football clubs arising from

transfers on 31 March of the season to be subjected to a core licensing procedure

which originated prior to 31 December (see also Annex 5).

f, The licence cannot be granted based on F.04.1 No overdue payables towards

employees, or F.04.2 No overdue payables towards social/tax authorities criteria

If no information is submitted to the Licensor with regard to payables to the employees or to

social and/or tax authorities.

‒ If the Licensee/Licence Applicant submits information that does not comply with the

minimum disclosure requirements.

‒ If the Licensee/Licence Applicant has overdue payables to the employees or to social

and/or tax authorities arising from contractual or other legal obligations on March 31 of

the season to be subjected to a core licensing procedure which originated prior to 31

December (see also Annex 5).

g, The licence cannot be granted based on F.05 Written representations prior to the

licensing decision criterion

‒ if the written representation signed by the management is not submitted to the Licensor

within the specified deadline.

‒ if based on the event or condition having major economic importance, assessed by the

Licensor, or according to past or future financial information, the Licensor thinks that the

Licensee/Licence Applicant may not be able to continue its enterprise at least by the

end of the season to be subjected to a core licensing procedure.

h, The licence cannot be granted based on F.06.1 Future Financial Information, Financial

Criteria

‒ if the Licensee/Licence Applicant does not submit by the required deadline future

financial information satisfying the minimum requirements;

‒ if, based on past and future financial information in the opinion of the Auditor or the

Licensor the Licence Applicant will not be able to continue its activities in compliance

with the going concern principle at least by the end of the season to be subjected to a

core licensing procedure.

The licence cannot be granted based on F.06.2. Deposits financial criterion



‒ if the deposit (F.06.2 (50. )) was not provided in the required manner;

i, ‒ The decision-making bodies must assess compliance with F.07 (50 ) obligation with

regard to the following core licence process.

‒ The Licensee/Licence Applicant must be sanctioned if it does not inform the Licensor of

any subsequent event that raises significant doubt about the ability of the

Licensee/Licence Applicant to continue its activities as an active business at least by

the end of the licensed season.



4. Detailed Criteria of Acceptance of the Club Licensing System

Article 16. Sports criteria

S.01 Youth development programme

Type: UEFA, NB I Degree A

The Licensee/Licence Applicant must have a written youth development programme complying with

the principles reviewed and approved in the core procedure by the sport expert of MLSZ Club

Licensing Administration. The programme must cover at least the following areas:

a) objectives and youth development philosophy;

b) organisation of youth sector (organisational chart; bodies involved, relation to

Licensee/Licence Applicant, youth teams, etc.);

c) personnel (technical, medical, administrative, etc.) and minimum qualifications required;

d) infrastructure available for youth sector (training and match facilities, other infrastructure);

e) financial resources (available budget, contribution by Licensee/Licence Applicant, players or

local community, etc.);

f) football education programme for the different age groups (playing skills: technical, tactical

and physical);

g) education programme on the ‘Laws of the Game’;

h) medical support for the youth players (including medical checks);

i) review and feedback process to evaluate the results and the achievements of the set

objectives;

j) term of the programme (at least 3, but not more than 7 years).

k) assurance that each youth player involved in its youth development programme has the

possibility to follow mandatory school education in accordance with national law;

l) assurance that no youth player involved in its youth development programme is prevented

from continuing their non-football education (supplementary school education or vocational

training).

m) education programme on anti-doping

Type: NB II Degree A

The Licensee/Licence Applicant must present the youth education programme in a short, 1-2-page

document, which must be submitted to the Licensor.

S.02 Youth teams

Type: UEFA, NB I, NB II Degree A

The Licence Applicant, as a legal entity, or another legal entity or a club attached thereto (obliged to

submit consolidated annual financial statements) must have youth teams in the following age

groups, the specific form of the requirement for which is specified in the effective MLSZ Competition

Specifications.

If the requirements stated in the respective Presidium Resolution approving the medium-term plan

of the Hungarian Youth system are lower than the minimum UEFA requirements, then the UEFA

licence applicants must satisfy the UEFA minimum requirements.

Each youth team must take part in official competitions or programmes played at national, regional



or local level and recognised by the National Federation.

If the requirements of the Competition Specifications do not meet the following requirements in

those respects, then the minimum UEFA requirements must be fulfilled:

a) at least two youth teams within the age range of 15-21;

b) at least two youth teams within the age range of 10-14;

c) at least one under-10 youth team.

Each youth team indicated in paragraphs a) and b) above must take part in official competitions or

programmes played at national, regional or local level and recognised by the National Federation.

Each youth player of such teams must be a player registered at national and/or regional level.

The youth teams must be in the same or adjacent county (or in Budapest) as the Licence

Applicant/Licensee.


The legal entity of the Licensee/Licence Applicant must have at least the following youth teams,

defined in the respective Presidium Resolution approving the medium-term plan of the Hungarian

Youth system, or at least the following youth teams must be attached thereto.

The legal entity of the Licensee/Licence Applicant must have at least the following youth teams, or

at least the following youth teams must be attached thereto:

a) at least 4 youth teams within the age range of 13-21;

b) at least 3 under-11 youth teams;

The youth teams must be operated in the same county as the licensee/licence applicant.

S.03 Medical care of players


The Licensee/Licence Applicant must ensure that all players eligible to play for its first squad

undergo a yearly medical examination in accordance with the relevant provisions of the UEFA Club

Competition Regulations.


The Licensee/Licence Applicant must ensure that each player eligible to squad undergo a yearly

medical examination in accordance with the relevant provisions of the Hungarian legal regulations.

S.04 Refereeing matters and Laws of the Game


The Licensee/Licence Applicant must prove that a meeting or event was organised by, or with the

involvement of, the National Federation dedicated to refereeing matters in the course of the year

prior to the season referred to in the application.

The obligation may be considered fulfilled if at least the captain or his deputy or the head coach of

the first squad or his deputy attended the meeting or event.

The MLSZ Committee of Referees must define and certify the date, agenda and participants of the

meeting.

S.05 Racial equality practice




The Licensee/Licence Applicant must establish and apply a policy to tackle racism and

discrimination in football in line with UEFA’s 10-point plan on racism as defined in the UEFA Safety

and Security Regulations.

Article 17. Infrastructure criteria

(1) Infrastructure criteria for granting national and international club licences

a, Compliance with the required infrastructure criteria must be certified with the result of the site

inspection performed by the infrastructure expert.

b, In case the UEFA Stadium Infrastructure Regulations or the MLSZ Infrastructure Regulations

are modified, the provisions of this Chapter must be applied with the modifications.

c, The club must have a stadium, the quality of which complies with the UEFA Stadium

Infrastructure Regulations in a manner described in these Regulations in order to be granted

an International (UEFA) Club Licence.

d, The club must have a pitch, the quality of which complies with the MLSZ Infrastructure

Regulations in a manner described in these Regulations in order to be granted a National

First Division (NB I) or Second Division (NB II) Club Licence.

I.01 Facility approved for competitions


The Licensee/Licence Applicant must have a stadium available for UEFA club competitions and/or

domestic matches of National First and Second Division competitions in compliance with the type of

the submitted licence application.

The Licensee/Licence Applicant

a) must be the lawful owner of the facility; or

b) may present written contracts concluded with the owner or owners of the facility(ies) to be

used by it. Such contracts must guarantee the use of the specific facility during the licensed

season for the home matches of UEFA and National First Division tournaments, in which the

Licensee/Licence Applicant can participate based on its sports performance.

The facility must be within the territory of Hungary.

I.01.1 Facility approved for national first and second division competitions

Type: NB I, NB II Degree A

NB I

The facility must comply with all minimum requirements of first class pitches defined in the MLSZ

infrastructure regulations and must also be certified as such by the National Federation.

NB II

The facility must comply with all minimum requirements of first second class pitches defined in the

MLSZ infrastructure regulations and must also be certified as such by the National Federation with

the differences defined in these Regulations.

For clubs qualifying from NB III (Third Division), the adequacy of the facility will be assessed based



on the written opinion of the expert of infrastructure criteria.

I.01.2 Facility approved for UEFA tournaments

Type: UEFA Degree A

The facility must comply with the minimum requirements laid down in the UEFA Stadium

Infrastructure Regulations and must be classified at least in Category 2.

I.02 Training facilities – availability


The Licensee/Licence Applicant must have training facilities available throughout the year.

The Licensee/Licence Applicant

a) Must be the lawful owner of the facility; or

b) may present written contracts concluded with the owner or owners of the training facilities to

be used by it. Such contracts must guarantee the use of the specific training facility during

the licensed season for the home matches of UEFA and National First Division

tournaments, in which the Licensee/Licence Applicant can participate based on its sports

performance for all teams that take part in competitions recognised by the national/regional

federation.

I.03 Training facilities – approved infrastructure


NB II not applicable

The Licensee/Licence Applicant must have available training facilities that complies with the

requirements defined by the Licensor in view of the approved youth education programme.

Article 18. Personnel and administrative criteria

P.01.1 Club Secretariat


The Licensee/Licence Applicant must have an office for maintaining its administration.

The required office space and minimum technical infrastructure (including telephone, fax and e-

mail) must also be available.

The Licensee/Licence Applicant must appoint an adequate number of skilled Secretariat staff

according to its needs to run its daily business. It must also ensure that its office is open to

communicate with the Licensor and the public.

P.01.2 Certification of language skills



UEFA

At least one member of the administration staff working at the Secretariat must have a language



certificate of intermediate level English language skills, recognised by the state.

NB I

At least one member of the administration staff working at the Secretariat must have a language

certificate of intermediate level language skills in any of the official UEFA languages, recognised by

the state.

P.02.1 Authorised company signatory


The Licensee/Licence Applicant must have an appointed authorised signatory who is responsible

for running its operative matters.

P.02.2 Minimum qualifications of the Authorised company signatory


The authorised company signatory must have higher education qualifications or at least secondary

level sports organiser / manager certificate recognised by the state, or any equivalent qualifications

acquired abroad, recognised by the Licensing Administration. The obligation may be considered

fulfilled if the authorised company signatory has already started the training programme which will

facilitate compliance with the above requirement. Enrolment for such a training itself cannot be

accepted as fulfilment of the obligation.

P.03.1 Finance Officer


The Licensee/Licence Applicant must appoint a Finance Officer who is responsible for its financial

matters. The Finance Officer may be an individual working in the administration of the

Licensee/Licence Applicant, or an external partner who is employed by the Licensee/Licence

Applicant for such purposes based on a contract.

P.03.2 Minimum qualifications of the Finance Officer


The Finance Officer must hold as a minimum one of the following qualifications:

a) diploma of certified public accountant; or

b) effective membership in the chamber of auditors

c) higher qualifications in economics or finance.

P.04.1 Security Director


The Licensee/Licence Applicant must appoint a Security Director responsible for security matters,

who may be an employee of the Licence Applicant or an employee or agent of an external partner

contracted for such purposes by the Licence Applicant.

P.04.2 Minimum qualifications of the Security Director


The Security Director must hold qualifications defined in the effective MLSZ Security Regulations.



P.05.1 Media Officer



The Licensee/Licence Applicant must appoint a Media Officer responsible for media matters, who

may be an employee of the Licence Applicant, or an employee or agent of an external partner

contracted for such purposes by the Licence Applicant.

P.05.2 Minimum qualifications of the Media Officer



The Media Officer must hold as a minimum one of the following qualifications:

a) qualified journalist; or

b) media officer / journalist diploma provided by the National Federation (MLSZ) or an

organisation recognised by it; or

c) valid press certificate

P.06.1 Medical doctor


The Licensee/Licence Applicant must appoint at least one doctor who is responsible for medical

services and support to the first squad and for doping prevention. The doctor must also provide

medical services/advice during matches and training.

The doctor may be an employee of the Licence Applicant or an employee or agent of an external

partner contracted for such purposes by the Licence Applicant.

P.06.2 Minimum qualifications of the doctor


The doctor must have a valid medical licence required under the regulations applicable to the medical licence.

P.07.1 Physiotherapist



The Licensee/Licence Applicant must have at least one physiotherapist who is responsible for

medical treatment and massages for the first squad during training and matches, or appoint a

person under any similar title for similar tasks.

The physiotherapist may be an employee of the Licence Applicant or an employee or agent of an

external partner contracted for such purposes by the Licence Applicant.

The physiotherapist must be registered by MLSZ.

P.07.2 Minimum qualifications of the physiotherapist





The physiotherapist must hold relevant higher qualifications or higher vocational qualifications (OKJ)

(Recognised List of Qualifications) (vocational qualifications) recognised by the state

P.08.1 Head Coach


The Licensee/Licence Applicant must appoint a Head Coach who is responsible for football matters

of the first squad.

The Head Coach must be registered by MLSZ.

The Head Coach is entitled to represent the club in professional matters in events organised by

MLSZ and its organisational units as well as members, including also matches and media coverage.

The Head Coach of the club is obliged to make sports professional statements in the media after

matches.

P.08.2 Minimum qualifications of the Head Coach


The expert must have effective qualification specified in the currently effective Resolution of

MLSZ_Presidium for the qualification requirements for football coaches and the further training

system. The copy of the document certifying the qualifications must be submitted.

P.09.1 Head of Youth Development Programme


The Licensee/Licence Applicant must appoint a Head of the Youth Development Programme who is

responsible for running the daily business and the technical aspects of the youth sector.

The Head of Youth Development Programme must be registered by MLSZ.

P.09.2 Minimum qualifications of the Head of Youth Development Programme





P.10.1 Youth coaches


For each mandatory youth team, the Licensee/Licence Applicant must appoint at least one qualified

coach, who is responsible for all football matters related to this team.

The youth coaches must be registered by MLSZ.

P.10.2 Minimum qualifications of the youth coaches







P.11.1 Security organisation - security team


The Licensee/Licence Applicant must contract security staff to establish a security team that

provides services at home matches. The members of the security team may be an employees of the

Licence Applicant, or an external partner contracted for such purposes by the Licence Applicant

(individual or company).

For such purposes, the Licensee/Licence Applicant

a) must employ security staff; or

b) enter into a written contract with the owner of the facility for the supply of security staff; or

c) enter into a written contract with the an external security company for the supply of security

staff.

P.11.2 Security organisation - qualifications of the security team


The members of the security team must hold qualifications defined in the effective MLSZ Security

Regulations and the national legislation.

P.12.1 Assistant Coach of first squad


The Licensee/Licence Applicant must appoint an Assistant Coach of the first squad who is

responsible for football matters of the first squad.

The Assistant Coach must be registered by MLSZ.

P.12.2 Qualifications of the Assistant Coach of first squad





P.13 Supporter Liaison Officer



The Licensee/Licence Applicant must appoint a Liaison Officer to act as the key contact point for

supporters.

The Supporter Liaison Officer must regularly attend meetings with the club’s management and must

collaborate with the Security Officer on safety and security related matters.

P.14 Technical Director and qualifications







P.15 Goalkeeper Coach and qualifications





P.16 Technical Manager and qualifications


The club must have a Technical Manager.

The technical manager must hold at least a basic diploma in sports management, acceptable to

MLSZ.

P.17 Endurance Coach and qualifications



The club must have an Endurance Coach.

The endurance coach must have a valid diploma in physical education or must be a qualified

fitness/personal coach or a UEFA coach “A”.

P.18 Masseur and Qualifications

Type: UEFA, NB I, NBII Degree A

The club must have a masseur.

The Masseur must hold valid qualifications in massage.

P.19 Accountant and qualifications


The club must have a registered chartered accountant.

P.20 Auditor and qualifications


The club must have an Auditor.

The Accountant must be an effective member of the chamber.

P.21 Rights and duties


The rights and duties of the employees or contracted staff of the Licensee/Licence Applicant defined

in criteria P.01-P.20 must be specified in writing, and the appointment/assignment must be

approved by the competent body of the Licensee/Licence Applicant. The individuals holding the

particular function must acknowledge it in a written form.



P.22 Exchange of personnel during the validity of the licence


If a function defined in P.01-P.20 criteria becomes vacant during the effective licence period, the

Licensee must ensure that, within a period of maximum 60 days, the function is taken over by

someone who holds the required qualifications specified in these Regulations or by law.

The sports club is not obliged to fill the position in the transition period, unless the law provides

otherwise.

If a sports club decides on substitution for the transition period, the position may be given only to

such a person who has the qualifications, required by the law for such position.

In the event that a position becomes vacant due to illness or accident, the Licensor may, based on

the Licensee’s prior request, grant an extension to the 60-day period only if reasonably satisfied that

the person concerned is still medically unfit to resume his duties.

The licensor shall be informed of the vacancy of the position and the change in personnel within 3

working days.

Any position shall be deemed vacant if the person concerned is unable to perform the tasks due to

any legal or technical reason.

P.23 Minimum qualifications – further rules


The Licence Applicant must ensure at all times that each member of its staff holds the required

qualifications defined in the Hungarian law with special regard to the Act on Sports (Act I of 2004),

the Government Decree NO. 157/2004 and the resolutions of the Presidium of the Hungarian

Football Federation.

The sports technical staff must have a number of people and comply with the staffing requirements

specified by the MLSZ Presidium, as well as the coach qualifications requirements.

Article 19/A Legal criteria

L.01 Declaration in respect of participation in UEFA and MLSZ competitions and

in respect to membership and independence


The Licence Applicant must submit a declaration made in front of a notary public, specifying the

recognition of the following or, if the Licensee/Licence Applicant is a club, then that its manager who

is an authorised company signatory accepts the following requirements:

a, The Licensee/Licence Applicant recognises as legally binding the statues, regulations,

directives and decisions of FIFA, UEFA and MLSZ and the jurisdiction of the Court of

Arbitration for Sport (CAS) in Lausanne, as provided in the relevant articles of the UEFA and

MLSZ Statutes;

b, at national level it will play in competitions recognised and endorsed by the National

Federation (this provision does not apply to friendly matches);

c, at international level it participates in competitions recognised by UEFA or FIFA (this provision

does not apply to friendly matches);



d, it will inform the Licensor about any significant change, event or condition of major economic

importance within five working days;

e, it will abide by and observe the provisions of these Regulations;

f, it will abide by and observe the UEFA Club Licensing and Financial Fair Play Regulations;

g, all submitted documents are complete and correct;

h, it authorises the competent club licensing organisations and representatives to examine any relevant document and seek information from any relevant public authority or private body in accordance with national law;

i, it acknowledges that UEFA and MLSZ reserve the right to audit operation in manners defined

in the laws, decrees and regulations and to act against any club that does not comply with the

criteria of these regulations during the competitions in progress;

j, it respects at all time the advertising and trading agreements concluded by the Hungarian

Football Federation and its representatives;

k, the Licensee/Licence Applicant is a member of the MLSZ and/or has a contractual relationship

with the registered member and fulfils the conditions of membership defined in the MLSZ

statutes;

l, no one may hold simultaneously any function or position in the management of more than one

club participating in the National First Division and/or be involved directly or indirectly in the

administration thereof;

m, neither club may perform any of the following activities, either directly or indirectly, with regard

to any other clubs taking part in the National First or Second Division or the UEFA club

tournaments:

- holding or trading of the securities or shares of another club; or

- membership in another club; or

- participation in the management or administration of another club in any manner;

or

- manipulation of the management or administration of another club in any manner

n, no other club taking part in the same competition is subject to joint control/supervision with the

Licensee/Licence Applicant.

In that context, joint supervision/control means that a natural person or a legal entity, directly

or indirectly

- holds the majority of the voting rights of the shares; or

- is entitled to appoint or recall the members of the administrative management or

supervisory committees; or

- pursuant to an agreement between the shareholder and the other shareholders of

that club holds the majority of the voting rights of the shareholders in several

clubs.

The authorised signatory must validate that declaration with a signature of a notary public attesting

it not later than three months prior to the deadline for submission to the Licensor.



L.02 Minimum legal information


The Licence Applicant must submit a copy of its current valid Deed of Foundation (Statutes, Deed of

Association and Deed of Foundation).

That document (if it is in a copy) must be signed by the authorised signatory not later than three

months prior to the deadline for submission to the Licensor.

The Licence Applicant must further submit an extract from a public register (e.g., Certificate of

Incorporation or an extract from the registration of social organisations) containing the following

minimum information:

a) company name of the Licensee/Licence Applicant;

b) exact address of the headquarters;

c) legal form;

d) list of authorised signatories;

e) type of required signature (individual, collective, etc.); (except social organisations)

f) date of the deed of foundation (except social organisations)

The document prepared according to the above requirements cannot be older than 3 months

calculated from the deadline for submission to the Licensor and the original copy must be

submitted.

The specimen signatures of the authorised representative(s) of the Licence Applicant club,

authenticated by a notary public or a lawyer, shall be submitted who authenticate the submitted

documents during the core club licensing procedure.

L.03 Declaration on the ownership structure



The Licence Applicant must submit a document or declaration presenting the ownership structure.

(Article 19/B (1) (46.)

L.04 Declaration on subsidiaries



The Licence Applicant must submit information concerning the subsidiaries. Article 19/B (2) (46.)

L.05 Declaration concerning obligatory reporting

Type UEFA Degree A

NB I, NB II not applicable

The Licence Applicant/Licensee shall inform the Licensor in a declaration that all activities described in Article 19/B 3/c) are contained in the books of any of the members of the group that has a reporting obligation and shall also provide detailed explanation if it is not the case.

If the Licensor/Licence Applicant missed out a parent company or a subsidiary from the companies subject to reporting obligations, it must provide detailed reasoning.



Article 19/B. Legal rules pertaining to related parties and subsidiaries

(1) Declaration on the group

Clubs applying for an international and national first division (NB I) licence prepare and submit to the

Licensor a description of the ownership structure of the group operating the club in the form of a

diagram), attested by the Licence Applicant’s management with their signatures.

Declaration on the ownership structure: it must contain the ultimate owners holding at least 10%

(direct and indirect participation together) in the particular legal entity or exercising influence over

the operation of the club in compliance with Article 3 (2) of Act C of 2000 on Accounting, as well as

subsidiaries controlled by them as the parent company.

(2) Declaration on subsidiaries

Declaration on related enterprises: the related companies and subsidiaries of the parent company must be listed in compliance with Article 3 (2) of Act C of 2000 on Accounting. The structure must indicate, without any doubt, the company/organisation that is a member of the Hungarian Football Federation. The following data must be presented for all related companies of the Licence Applicant:

- name of the legal entity

- type of the legal entity

- core activity of the legal entity and all its activities relating to football

- ownership ratio and, if different, the voting ratio

- registered capital

- total assets

- total revenues

- shareholder’s equity

(3) Reporting perimeter (only for UEFA/ NB I licence applicants / licensees)

a, The scope of the reporting perimeter is established by the Licence Applicant in view of these regulations. Consequently, the scope of reporting perimeter include those legal entities or the combination thereof, which are members of the group and in relation to which the Licence Applicant must submit the request for information presented in the financial criteria (e.g., annual report) as if they were one organisation. If in relation to these regulations the scope of the reporting perimeter includes several legal entities, consolidated or combined annual reports shall be submitted.

b, The reporting perimeter must include all entities in whose books the following is accounted for:

1. payment of compensation arising from a legal or contractual obligation to natural persons or legal entities presented in the personnel criteria

2. expense, or revenue from the acquisition or sale of the playing rights of a player

c, The reporting perimeter should include all entities included in the legal group structure and in particular all entities which generate revenues and/or perform services and/or incur costs in respect of the following activities of the license applicant: a) ticketing; b) sponsorship and advertising; c) broadcasting; d) merchandising and hospitality;



e) club operations (e.g. administration, matchday activities and travel); f) financing (including financing secured or pledged against the assets of the licence applicant); g) use and management of stadium and training facilities;

h) youth sector.

d, An entity may be excluded from the reporting perimeter only if: a) it is immaterial compared with the overall group made by the licence applicant; or b) its main activity is not related to the activities, locations, assets or brand of

the football club.

Article 20/A Financial criteria

F.01/1 Annual Report


1. Disclosed/to be disclosed annual report

The Licence Applicant must prepare annual financial statements for the financial year directly preceding the core procedure which must be signed by the licence applicant/authorised signatory of the licensee, audited and disclosed/to be disclosed yet and submit them to the Licensor. The annual report submitted pursuant to F01/1, 1 must comply with the provisions of Act C of 2000 or shall contain at least the following information, of which only those must be published in relation to which it is required under Act C of 2000 on Accounting: (1)balance sheet; (2) profit and loss; (3) cash flow statement; (4) notes to the financial statement, comprising a summary of significant accounting policies and other explanatory notes; (5) Business Report. The disclosed/to be disclosed yet annual financial statements must meet the minimum disclosure requirements as set out in Annex 2 (except when they prepare and submit annual financial statements that also comply with the MLSZ regulations) and the accounting principles as set out in Annex 3 (except paragraph C/4/c). The comparative figures in respect of the prior statutory closing date must also be provided.

2. Annual report containing financial information that also comply with the MLSZ regulations The annual report that complies also with the MLSZ regulations shall be prepared and submitted in compliance with the accounting principles included in Annex 3. If the report prepared according to the provisions of the Accounting Act and submitted and disclosed/to be disclosed does not contain all information which is required under Annex 2 of these regulations, or does not comply with the principles laid down in Annex 3 in everything, the Licence Applicant shall submit the missing financial information in a supplementary document (balance sheet, profit and loss account, separate declaration containing the financial information that comply with the MLSZ regulations). The financial information complying also with the MLSZ regulations and submitted as part of the data supply shall be audited by an independent auditor. NB II Licence Applicants are exempted from the obligation to have supplementary financial information audited.



The annual report submitted pursuant to F01/1, 2 shall also comply with the provisions of Act C of 2000 on Accounting and shall contain at least the following, only for the current year: (1) balance sheet; (2) profit and loss account.

F.02 Interim financial statements



If the statutory closing date of the Licence Applicant is not 31 December, then the Licence Applicant

must prepare interim financial statements in compliance with the respective provisions of the UEFA

Club Licensing and Financial Fair Play Regulations, which then must be audited by an independent

auditor and submit it to the Licensor. In that case, the Licence Applicant must comply with all

respective provisions of the Regulations referred to above.

F.03 No overdue payables towards football clubs


The Licence Applicant must prove that as at 31 March preceding the season subjected to a

licensing procedure it has no overdue payables as defined in Annex 5 that relate to football clubs in

relation to transfers that occurred prior to 31 December of the previous year.

F.04.1 No overdue payables towards employees


The Licence Applicant must prove that as at 31 March preceding the licence season it has no

overdue payables as defined in Annex 5 towards its employees as a result of contractual and legal

obligations towards its employees that arouse prior to 31 December of the year prior to the season

to be subjected to a core licensing procedure.

F.04.2 No overdue payables towards social/tax authorities


The Licence Applicant must prove that as at 31 March preceding the licence season it has no

overdue payables as defined in Annex 5 towards its employees as a result of contractual and legal

obligations towards tax authorities that arouse prior to 31 December of the year prior to the season

to be subjected to a core licensing procedure.

F.05 Written representations prior to the licensing decision


1. Within 7 days prior to the start of the period in which the licensing decision is to be made by the

First Instance Committee, the Licence Applicant must make written representations to the

Licensor.

2. In the written representation, the Licence Applicant informs the Licensor of the events that

occurred after the balance sheet date of the preceding audited annual financial statements and

influenced the company’s financial position significantly.

3. If any event occurred that significantly influenced the financial position of the Licence Applicant,

then the representation must include a description of the nature of the event or condition and



an estimate of its financial effect, or a statement that such an estimate cannot be made.

4. The representation is authenticated with the signature of the Licence Applicant’s management.

5. The Licence Applicant must confirm that the Licence Applicant (or the registered member of the

UEFA member association which has a contractual relationship with the Licence Applicant) or

any parent company of the Licence Applicant included in the scope of the financial statements

is seeking or has received protection from its creditors pursuant to the laws and regulations

(including voluntary or mandated administration procedures) within 12 months preceding the

licence season.

F.06.1 Future financial information


A,

Future financial information

The Licensee/Licence Applicant must prepare and submit future annual financial information,

containing the following information:

a) a budgeted profit and loss account, with comparative figures for the immediately

preceding financial year and interim period

b) a budgeted cash flow, with the data of the cash flow statement contained in the

submitted annual report as comparative data (NB II licence applicants are not obliged to

submit a cash-flow plan);

c) explanatory notes, including a description of each of the significant assumptions that

have been used to prepare the budgeted profit and loss account and cash flow

statement, as well as of the key risks that may affect the future financial results

The financial plan must cover the period from the balance sheet date of the annual financial

statements to the end of the licensed season.

Future financial information must be prepared, as a minimum, on a quarterly basis.

The financial budget must be in line with the data of the submitted annual report and with the

data stated in the declaration on the resolution of the equity problems submitted as and when

required. It must be prepared following the same accounting policies as those applied for the

preparation of the annual financial statements, except for accounting policy changes made

after the date of the most recent annual financial statements that are to be reflected in the

next annual financial statements. In that case the changes and their impacts on the future

financial information must be disclosed.

Future financial information must meet the minimum disclosure requirements as set out in

Annex 3. Additional line items or notes must be included if they provide clarification or if their

omission would make the future financial information misleading.

Future financial information with the assumptions upon which they are based must be

approved by management and this must be evidenced by way of a brief statement.

B,

Budget-actual comparison

If the budget figures of the planned profit and loss account submitted by the Licence Applicant in the previous year’s core club licensing procedure and the actual values of the same items show a significant difference (upon the respective invitation of the Licensor), the Licence Applicant shall briefly present an explanation for the significant differences, documenting the assumptions used in the course of budgeting. The analysis shall apply to the business year closed during the licensing procedure.



C,

Submission of a business plan in the case of the change of owners

If there is a change in the owner having a majority share in the Licence Applicant/Licensee or the owner, or the party having the highest controlling rights during the licensed season, then the Licence Applicant/Licensee shall submit a business plan to the Licensor within 60 days from the registration of the change, which the Licensor shall evaluate and make a proposal as and when necessary.

F.06.2 Deposits



The Licensee/Licence Applicant must deposit at least HUF 25 million worth security.

The security may be provided in the form of

a) cash;

b) bank guarantee;

c) a surety in the form of a notarised deed.

F.07 Obligation to enhance future financial information



If the Licensee/Licence Applicant is in breach of ‘IND: 01: Indicator 01’ of the two indicators specified in Article 20/C. (51.)

it must prepare and submit the enhanced version of future financial information, prepared on three-

monthly basis (calendar quarter) (31 March, 30 June, 30 September and 31 December) and submit

it to the Licensor by the end of the month that follows the relevant calendar quarter.

In addition, the prepared information must contain a comparison of the planned budget to the actual

figures with an explanation of any discrepancy.

The enhanced future financial statements must comply with the minimum disclosure requirements

defined in these Regulations.



Article 20/B Rules pertaining to the Consolidated Annual Report

(1) Rules pertaining to UEFA licence applicants

If an international (UEFA) Licence Applicant or an international (UEFA) Licensee controls any

subsidiary and is obliged to prepare a consolidated annual report, then the consolidated financial

information must be prepared and submitted to the Licensor as if the consolidated legal entities

(group) formed one single company.

If an international (UEFA) Licence Applicant or international (UEFA) Licensee is controlled by a parent company, which may be controlled by another parent company, or which may have control over any other parent company, or which may exercise dominant influence in any other related company, then any transaction with the parent company of the Licence Applicant/Licensee, and any related company subsidiary or parent company of such a parent company must be disclosed in the supplementary notes to the annual report, in order to indicate the possibility that the existence of related parties, and the transactions with and overdue receivables from such parties may have an impact on the financial position and profit.

(2) Rules pertaining to UEFA/NBI-II licence applicants

a,

If the Licence Applicant is obliged to prepare consolidated annual financial statements pursuant to the provisions of the Accounting Act, then the consolidated financial statement must also be prepared and submitted to the Licensor also for the submission of the licence application. In such cases, the Licence Applicant must comply with the respective provisions of the UEFA Club Licensing and Financial Fair Play Regulations.

b, Paragraphs b)-d) of this Article apply to the reporting obligations of the Licence Applicant pursuant to the UEFA Club Licensing and Financial Fair Play Regulations, and therefore the club has a reporting obligation with regard to all such organisations.

c, Each payment made pursuant to contractual or legal obligations and made to players, each revenue and expense relating to the purchase and sale of players, and each revenue from the sale of tickets must be included in the submitted (consolidated) annual financial statements.

d,

The international (UEFA) Licence Applicant must define the related legal entities, and the related and affiliated companies for the purposes of the submission of the financial information

(e.g., simple, consolidated or combined financial statements) pursuant to paragraph Article 4. (2) a (15.)

e,

Each payment made pursuant to contractual or legal obligations and made to players, each revenue and expense relating to the purchase and sale of players and each revenue from the sale of tickets must be included in the books of any of the related or affiliated companies of the legal entity.

Article 20/C. Financial indicators and overdue debts during the year

a, Indicators

The licence applicant is in breach of indicator 1 if the Auditor’s Report in respect of the annual financial statements submitted in accordance with F.01 (47) includes an emphasis of matter or a qualified opinion/conclusion in respect of the going concern.

The licence applicant is in breach of indicator 2 if n the audited annual financial statements submitted pursuant to indicator F.01

- the equity of the UEFA/NBI and NBII Licence Applicant/Licensee is lower than HUF 20



million,

- the equity of the NB II licence applicant is negative.

If a Licensee/Licence Applicant exhibitors any of the conditions described in Categories IND.01 and IND.02 below, it is considered in breach of the indicator(s).

IND.01: Indicator 1: Going concern principle

‒ The Auditor’s Report in respect of the annual financial statements submitted in

accordance with Article F.01(47.) includes an emphasis of matter or a qualified

opinion/conclusion in respect of the going concern.

IND.02: Indicator 2: Shareholder’s equity

‒ In the audited annual financial statements submitted pursuant to indicator F.01

‒ the equity of the UEFA/NBI and NBII Licence Applicant/Licensee is lower than HUF 20

million,

‒ the equity of the NB II licence applicant is negative.

By the end of the financial year in which the relevant licence application was submitted.

In case ‘Indicator 1’ is in breach, the Licensor may request further guarantees (report on actions, on plans of action and other security) from the Licensee/Licence Applicant in order to enable the club to prove that it is capable of complying with the going concern principle by the end of the championship.

If „Indicator 2” is in breach, the licensee/licence applicant shall prepare and sufficiently detailed schedule and present it to the licensor, indicating the specific activities and a schedule with which they intend to restore the situation referred to in Article 161 1/b, not later than by the end of the financial year in which the respective licence application is submitted.

b, Overdue payables during the year

1. The Licence Applicant must prove that as at 30 September it has no overdue payables as defined in Annex 5 towards its employees as a result of contractual and legal obligations towards its employees that arouse prior to 30 June of the same year.

2. The Licence Applicant must prove that as at 30 March preceding the licence season it has no overdue payables towards sports organisations/sports clubs that are defined in Annex 5 and refer to transfer activities that occurred prior to 30 June of the same year.

3. The Licence Applicant must prove that as at 30 September of the year it has no overdue payables towards tax authorities as specified in Annex 5 that arose prior to 30 June.

Article 20/D Rules of future financial criteria concerning reporting obligations

(1) Obligation to report subsequent events

a, Following the decision made by the decision-making body concerning the licence, the

Licensee/Licence Applicant must inform the Licensor immediate in writing of any subsequent

event that raises significant doubt about the Licensee’s ability to continue its activities in

compliance with the going concern principle at least by the end of the licensed season.

(2) Reporting period

b, From the date of issue of the licence to the end of the licensed season, the Licensee must

notify the Licensor immediately in writing of any subsequent event that may raise significant

doubts about the ability of the Licensee/Licence Applicant to continue its business activities by

the end of the licensed season.

The Licensor may request information and/or written declaration from the Licensee



concerning such potential or assumed events or conditions at any time.

(3) Information to be prepared by the Licensee/Licence Applicant

c, The information prepared by the Licensee must contain a description of the event or condition

and the estimated financial impact thereof, or a statement indicating that no such estimate can

be made (including the supporting reasons). The Licensor may request other information

and/or declarations from the Licensee.

(4) Assessment of subsequent events

d, The assessment procedures are conducted by the Licensor who may also request, if

considered appropriate, the appointment of the Licensee’s own auditor to verify the

procedures under a specific agreement.

The Licensee must submit to the Licensor one copy of the future financial information

approved by the management and a copy of the report containing the Auditor’s finding. The

Licensor must assess the latter.

5. Notification obligations of clubs concerning the licence and licence

application

Article 21. Notification obligations of the Licence Applicant/Licensee

(1) Obligations of the Licence Applicant/Licensee

a, ‒ The club must inform the Licensor of any event/change occurring at any time after the

submission of the licence documentation and/or during the season that relates to the

fulfilment of any criterion A or compliance therewith. The notification itself does not mean

that the respective criterion has been fulfilled, or that compliance with it has been duly

certified by the club, because it is the right and responsibility of the Licensor to assess

and evaluate it.

‒ Clubs have prior notification and information obligations in the following cases:

‒ Change of ownership.

‒ Any other change in the ownership structure;

‒ Change in the contract regulating the use of the facility

‒ Change in the head coach or members of the professional staff (in cases other than

immediate extraordinary dismissal)

‒ Failure to report any predictable change specified in paragraph Article 21. (1) a, (53.)

triggers a sanction.

b, Failure to fulfil the information obligation concerning material changes

- If that obligation is not fulfilled, the Licensor may punish the Licensee/Licence

Applicant by applying the legal consequences defined in the catalogue of sanctions

or the Disciplinary Regulations. The sanction may be applied during the current

season or with regard to the next licensing core procedure.

c, Reporting or data supply obligation initiated by the Licensor

- In addition, the Licensor may request a document from the licence

application/Licensee or conduct a site inspection in order to check compliance with



the criteria either during the licensing procedure and/or at any time subsequently.

The Licensor has an exclusive right to establish the need for or objective of such site

inspections.

6. Rules applicable to the sanctions and disciplinary cases of the MLSZ

Club Licensing System

Article 22. Rules applicable to the sanctions and disciplinary cases of the

MLSZ Club Licensing System

(1) Rules of sanctions and measures

a, MLSZ has created a catalogue of sanctions (point d.) in order to ensure adequate evaluation

procedures and may refer to the Disciplinary Regulations of the Federation and to these

Regulations with regard to any procedure to be applied based on the violation of the

licensing rules.

List of the available sanctions and measures:

‒ disciplinary warning

‒ obligation to provide a guarantee

‒ obligation to provide evidence

‒ fine

‒ point deduction

‒ licence withdrawal

b, The violation of any provision of these Regulations may be sanctioned and measures may be

applied against the club. Each case, supported with the appropriate documentation, is

submitted to the Disciplinary Committee based on the proposal of the Club Licensing

Administration. In certain cases, when the regulations are especially gravely violated, a

licence review may be launched based on the decision of the First Instance Committee.

c, The MLSZ Disciplinary Committee and, in some cases, the MLSZ First Instance Committee,

has the right to impose a sanction or apply a measure against the Licensee/Licence

Applicant. The Licensee/Licence Applicant may appeal to the appropriate appeals

committee.

d, If the First Instance Committee or the Appeals Committee applies any sanction or orders a

measure against the Licence Applicant/Licensee, the chairman of the respective body must

inform the Disciplinary Committee about it.

e, The Licensor may sanction a club or order a measure against it for the particular or the

subsequent season.

(2) Rules applicable to disciplinary cases

a, The MLSZ Disciplinary Regulations must be applied to any violation of the licensing

regulations (including but not limited to submission of forged documents, missing deadlines)

or any other disciplinary matter occurring during the licensing procedure.

(3) Review procedure, modifications

a, The Licensor must ensure that all applicable provisions of the UEFA Club Licensing and



Financial Fair Play Regulations are transposed into MLSZ Club Licensing Regulations, and

that they are submitted to UEFA Administration in one of the official UEFA languages for

review in line with the procedure described in Annex III. of the UEFA Club Licensing and

Financial Fair Play Regulations. The Hungarian Football Federation may modify its own Club

Licensing Regulations freely at any time.

b, The National Federation is notified in writing of the decision of the review, which is

final and effective.

IV.MONITORING

1. On-site inspections

Article 23. Principles of the site inspections conducted by UEFA and MLSZ

(1) Site inspections conducted by UEFA and compliance audits

a, UEFA and/or authorised bodies/representatives retain the right to conduct a site inspection

and compliance audit at the applicant club, in the presence of the latter, in order to ascertain

that the licence was properly issued based on the final and effective resolution/decision of

the Licensor. Any non-compliance with the mandatory requirements stated in the MLSZ Club

Licensing Regulations reviewed by UEFA may trigger sanctions imposed by the respective

UEFA body in line with the severity and nature of the infringement.

b, UEFA and/or its authorised bodies/representatives retain the right to conduct a site

inspection at the Licensor at any time to verify whether or not the minimum requirements of

the core procedure are complied with. Any non-compliance with the specified mandatory

requirements may trigger sanctions imposed by the respective UEFA bodies in line with the

severity and nature of the infringement.

c, In case of any discrepancy in the interpretation of the text of the UEFA official language and

Hungarian language versions of the MLSZ Club Licensing Regulations in the course of a site

inspection or compliance audits conducted by UEFA, then the UEFA official language (in this

case the English language) version shall prevail.

(2) Site inspections conducted by MLSZ

a, MLSZ retains the right to conduct a site inspection or compliance audit at the

Licensee/Licence Applicant in order to verify whether or not the Licensee/Licence Applicant

complies with all the criteria of these Regulations at any time. The Licensor must inform the

Licence Applicant/Licensee of the site inspection in advance. The Licence

Applicant/Licensee must consent to the site inspection at the requested time, or not later

than within 5 working days from the requested time and provide the information requested

within the framework of the site inspection by presenting all requested documents to the

Licensor or the individual(s) authorised by it. If that obligation is not complied with, the

Licensor or the Disciplinary Committee may impose sanctions on the Licensee/Licence

Applicant in line with the legal consequences defined in the catalogue of sanctions and

measures.



2. UEFA Monitoring, other monitoring requirements

Article 24. Provisions pertaining to UEFA Club Monitoring

(1) Tasks of the UEFA Club Financial Control Body

a, The UEFA Club Financial Control Body:

‒ executes and/or makes decisions in relation to the compliance audits;

‒ controls the club monitoring procedure, assesses the adequacy of the information

prepared by the Licensee and submitted by the Licensor and concludes whether or

not all monitoring requirements have been fulfilled and decides on any further

information required as described in Articles d,, e,, f,,

‒ executes all other tasks that are defined in the respective paragraphs of the UEFA

Organisational Regulations

b, In carrying out these responsibilities, the UEFA Club Financial Control Body ensures equal

treatment of all Licensees and guarantees full confidentiality of all information provided.

c, The UEFA Club Financial Control Body at all times bears in mind the overall objectives of

these Regulations, in particular to defeat any attempt to circumvent these objectives.

d, The monitoring process starts on submission by the licensor of the list of licensing decisions

to the UEFA administration and ends at the end of the licence season.

e, The monitoring procedure consists of the following minimum key steps:

1. issuing of the monitoring documentation to the Licensor and Licensee;

2. transfer of the required completed monitoring documentation by the Licensee to the

Licensor;

3. assessment and confirmation of the completeness of each Licensee’s documents by

the Licensor;

4. submission of the validated documentation by the Licensor to the UEFA Club

Financial Control Body;

5. assessment of the documentation by the UEFA Club Financial Control Body;

6. if appropriate, request for additional information by the UEFA Club Financial Control

Body;

7. decision by the UEFA Club Financial Control Body as specified in the relevant

provisions of the Procedural rules governing the UEFA Club Financial Control Body.

f, The UEFA Administration communicates the due dates of the steps of the above monitoring

procedure in a timely manner.

(2) Licensor’s tasks

a, The Licensor must:

‒ communicate the deadlines of the monitoring process to the Licensee.

‒ inform the Licensee of the data supply obligation and, to the extent required, prepare

and send to the Licensee templates for the required data supply;

‒ co-operate with the UEFA Club Financial Control Body in respect of its requests and

enquiries



‒ ensure and confirm to the UEFA Club Financial Control Body that all information

submitted by the Licensee with regard to the break-even information is complete and

is in line with the information submitted previously for the purposes of the club

licence

‒ assess and confirm to the UEFA Club Financial Control Body that the selected

reporting entity/entities is/are the same as those that fulfilled the club licensing

criteria and is/are appropriate for club monitoring purposes

‒ inform the UEFA Club Financial Control Body of any relevant information submitted

by the Licensee in respect of club monitoring requirements and any event occurring

after the licensing decision that constitutes a significant change to the information

previously submitted by the Licensee.

b, In carrying out these responsibilities, the Licensor ensures equal treatment and guarantees

full confidentiality of all information provided.

(3) Tasks of the Licensee

a, The Licensee must:

‒ prepare and provide all data within the deadline specified by the Federation by

performing the steps defined by the Club Licensing Administration.

‒ co-operate with the Licensor and the UEFA Club Financial Control Body in respect of

their requests and enquiries;

‒ provide the Licensor and the UEFA Club Financial Control Body with all necessary

information and/or relevant documents to fully demonstrate that the monitoring

requirements are fulfilled, as well as any other document requested and deemed to

be relevant for club monitoring decision-making. (The reporting entity or combination

of entities in respect of which information is required to be provided must be the

same as for club licensing.);

‒ promptly notify the Licensor in writing about any subsequent events that constitute a

significant change to the information previously submitted to the Licensor.

(4) Audit of clubs taking part in UEFA Tournaments

a, All Licensees that have qualified for a UEFA tournament must comply with the monitoring requirements, i.e. with the break-even requirement stated in Annex 10 (95.) and other control requirements. (Annex 10, 98.)

b, The following clubs are exempt from the break-even requirement:

‒ a club that qualifies for a UEFA club competition on sporting merit and is granted

special permission as defined in Article 13. (30.);

‒ a Licensee that demonstrates it has relevant income and relevant expenses as

defined in paragraphs (1-2) of Annex 10. (95.) below EUR 5 million in respect of

each of the two reporting periods ending in the two years before commencement of

the UEFA club competitions. Such an exemption decision is taken by the UEFA Club

Financial Control Body and is final.

c, If a Licensee’s annual financial statements are denominated in a currency other than euros,

then to determine whether it should be exempt or not from the break-even requirement, the

relevant figures must be converted into euros at the average exchange rate of the reporting

period, as published by the European Central Bank or other appropriate source if the



applicable rate is not available from the European Central Bank.

d, If the reporting period for the annual financial statements is greater or less than 12 months,

then the threshold of EUR 5 million (relevant income/relevant expenses) is adjusted up or

down according to the length of the reporting period. The EUR 5 million threshold level is

then compared to the Licensee’s relevant income and relevant expenses as appropriate.



Annex 1: Determination of the Auditor and Auditor’s assessment procedures

A. Principle

1. The Auditor must be independent in compliance with the International Federation of Accountants (IFAC) ‘Code of Ethics for Professional Accountants’.

2. The Auditor must be an active member of the Hungarian Chamber of Auditors.

B. Audit procedures

1. The auditor must issue an independent audit report for the annual report.

a. The Auditor’s Report must include a statement confirming that the audit was conducted in accordance with the International Standards on Auditing.

b. The Auditor’s Report must be submitted to the Licensor together with the annual financial statements to form a basis for his licensing decision.

2. If the financial year of the Licence Applicant does not end on 31 December, then the Auditor must take into account the provisions of F.02 (48.)

3. The Auditor must assess supplementary information.

a. The Auditor’s Report must contain a statement indicating that the assessment was conducted in accordance with the (ISRS) 4400 Standard.

b. The Auditor’s Report must be submitted to the Licensor together with the supplementary information to form a basis for his licensing decision.

c. For UEFA/NB I licence applicants the Auditor’s Report must contain a statement indicating the sampling procedure(s) that were applied during the audit. That report shall contain at least the following information: the sample from which the specific players and/or employees were selected, the sampling procedure and the process and result of the analysis.

4. Financial information other than the financial statements must also be assessed by an Auditor.

a. The Auditor’s Report must contain a statement indicating that the assessment was conducted in accordance with the (ISRS) 4400 Standard.

b. The Auditor’s Report must be submitted to the Licensor together with the relevant documentation to form a basis for his licensing decision.



Annex 2: Minimum disclosure requirements

A. Principle

1. In addition to the provisions of Act C of 2000 on Accounting, the Licence Applicant/Licensee must provide minimum information to the Licensor in accordance with the financial criteria defined in Articles F.01 (47.), F.02 (48.), F.06.1

(49.) and F.07 (50. ) of these Regulations.

2. Each component of the financial statements must be identified clearly. The following information must be displayed prominently, and repeated where necessary within the financial statements, for a proper understanding of the information presented:

a. The name (and legal form), domicile and business address of the reporting entity and any change in that information since the previous statutory closing date

b. whether the financial information covers the individual licence applicant/licensee or a group of entities or some other combination of entities, and a description of the structure and composition of any such group or combination;

c. the statutory closing date and the period covered by the financial information (for both current and comparative information)

d. the presentation currency

B. Balance sheet

1. The minimum requirements for balance sheet items are stated below:

Current assets

a. Cash and cash equivalents

b. Accounts receivable from player transfers

c. Accounts receivable from group entities and other related parties

d. Other current assets

e. Inventories

Non-current assets

a. Tangible fixed assets

b. Intangible assets – players

c. Intangible assets – other

d. Investments

e. Other non-current assets

Current liabilities

a. Bank overdrafts and loans;

b. Accounts payable relating to player transfers;

c. Accounts payable to group entities and other related parties;

d. Accounts payable to employees;

e. Liabilities to NAV;

f. Other short-term liabilities;

g. Short-term provisions



Non-current liabilities

a. Bank and other loans

b. Accounts payable relating to player transfers

c. Wage taxes payable to NAV;

d. Other non-current liabilities;

e. Other tax liabilities;

f. Long-term provisions

Net assets/liabilities

a. net assets/liabilities

Equity

a. Shareholder’s equity

Capital

a) Repurchased participation (e.g., own share, business quota)

b) Issued capital and reserves

(1) The Licence Applicant/Licensee may consider that above information are best presented in the balance sheet or in the notes.

(2) The net assets/liabilities figure, being the aggregate of total assets less total liabilities, is used to determine whether or not the licence applicant/licensee is in breach of indicator 2 described in

(3) Article 20/C. (51.) and Annex 10. (6) b, (97. )

C. Profit and loss

The minimum requirements for profit and loss accounts are stated below:

Revenues

1. gate receipts;

2. sponsorship and advertising

3. broadcasting rights

4. commercial

5. UEFA solidarity and prize money

6. Revenues from the sale of players (if the playing right of the players was not registered with the capitalisation/depreciation method).

7. Revenues from corporation tax support

8. other operating income

Expenses

1. cost of sales/materials

2. employee benefits expenses

3. depreciation and amortisation

4. impairment of fixed assets

5. other operating expenses

Other



1. profit/loss on disposal of assets

2. profit/loss on disposal of intangible assets - players

3. finance income

4. finance costs

5. tax expenses

6. profit or loss after taxation

The Licence Applicant/Licensee may consider that above information are best presented in the balance sheet or in the notes.

D. Cash flow statement

1. The cash flow statement must report cash flows for the financial period (and comparatives for the previous financial period), classified separately as stated below.

1. cash flow from operating activities

Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities.

2. cash flows from investing activities

Investing activities are the acquisition and disposal of long-term assets (including player registrations) and other investments not included in cash equivalents. The entity must report separately major classes of gross cash receipts and gross cash payments arising from investing activities.

3. cash flow from financing activities

Financing activities are activities that result in changes in the size and composition of the contributed equity share capital and borrowings of the entity. The entity must report separately major classes of gross cash receipts and gross cash payments arising from financing activities.

The received and paid interests and dividends must be presented by period, in a systematic manner, as a change in cash arising from operation, investment or financing activities. The cash flow from profit tax must be presented as change in cash arising from operating activities, except if it arises expressly and unambiguously from investment or financing activities.

2. The cash and cash equivalent groups must be reported separately, and the figures stated in the cash flow statement must be reconciled with the amounts reported in the balance sheet.

E. Notes to the financial statements

1. Notes to the annual financial statements must be presented in a systematic manner. Each item on the face of the balance sheet, profit and loss account and cash flow statement must be cross-referenced to any related information in the notes. The minimum requirements for disclosure in notes are as follows:

a. Accounting policies



The basis of preparation of the financial statements and a summary of the significant accounting policies used.

b. Tangible fixed assets

Each class of tangible fixed asset must be disclosed separately (e.g. property, stadium and equipment).

The following information must be disclosed for each class of tangible fixed asset:

1. the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period

2. a reconciliation of the carrying amount at the beginning and the end of the period, showing additions, disposals, increases or decreases during the period resulting from revaluations, impairment losses recognised in the profit and loss account during the period (if any), impairment losses reversed in the profit and loss account during the period (if any) and depreciation.

The depreciation methods and useful lives (or depreciation rates) used must be disclosed in the accounting policy notes.

c. Intangible fixed assets

Each class of intangible fixed asset must be disclosed separately (e.g. player registrations, goodwill, other intangible assets).

The following information must be disclosed for each class of intangible fixed asset:

1. the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period

2. a reconciliation of the carrying amount at the beginning and the end of the period, showing additions, disposals, decreases during the period resulting from impairment losses recognised in the profit and loss account during the period (if any) and amortisation.

3. if the playing right of the players is capitalised, then the depreciation policy applied to the capitalised values.

d. Pledged assets and assets under reservation of title

The existence and amounts of restrictions on title, and property, stadium and equipment pledged as security for liabilities or guarantees, must be disclosed.

The existence and carrying amounts of intangible assets whose title is restricted and the carrying amount of intangible assets pledged as security for liabilities must be disclosed.

e. Investments

In respect of investments in subsidiaries, jointly controlled entities and associates, the following information must be disclosed as a minimum for each investment:



1. name

2. country of incorporation or residence

3. type of business

4. proportion of ownership interest

5. if different, proportion of voting power held

6. description of the method used to account for the investments

f. Bank overdrafts and loans

For each class of financial liability the following must be disclosed:

1. information about the extent and nature of the financial instruments, including amounts and duration and any significant terms and conditions that may affect the amount, timing and certainty of future cash flows.

2. the accounting policies and methods adopted, including the criteria for recognition and the basis of measurement applied

g. Provisions

Provisions must be disclosed in separate classes. Provisions with identical nature belong to one group.

For each class of provision, the carrying amount at the beginning and end of the period, the amount utilised and any amount released, or credited, in the period must be disclosed.

h. Issued capital and reserves

Share capital, other reserves and retained earnings must be disclosed separately.

1. Share capital

In relation to share capital issued during the current year the following must be disclosed:

number and type of shares issued

share premium (if applicable) arising on the shares issued

total amount raised as a result of the issuing of shares

reason for the issuing of new shares

2. Other reserves

Where items of property, stadium and equipment are stated at revalued amounts, the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders, must be disclosed.

3. Profit reserve

The balance of retained earnings (i.e. accumulated profit or loss) at the beginning of the reporting period and at the balance sheet date, and the changes during the reporting period, must be disclosed.

i. Controlling (ultimate) party



When the Licence Applicant/Licensee is controlled by another party, the related party relationship and the name of that party must be disclosed. If the ultimate owner company is different, then its name must be disclosed irrespective of whether any transactions have taken place between the controlling parties and the reporting entity.

j. Related party transactions

If there have been transactions between related parties during the periods covered by the financial statements, the reporting entity must disclose the nature of the related party relationship, as well as information about those transactions and outstanding balances, including commitments, necessary for an understanding of the potential effect of the relationship on the financial statements. Items of a similar nature may be disclosed in aggregate except when separate disclosure is necessary for an understanding of the effects of related party transactions on the financial statements of the reporting entity.

As a minimum, disclosures must include for each related party:

1. the amount and the nature of the transactions

2. the amount of outstanding balances, including commitments, and

a. their terms and conditions, including whether they are secured

b. details of any guarantees given or received

3. provisions for doubtful debts

4. the expense recognised during the period in respect of bad or doubtful debts

The disclosures required must be made separately for each of the following categories:

the parent

entities with joint control or significant influence over the reporting entity

subsidiaries

associates

joint ventures in which the Licence Applicant/Licensee is a venturer

key management personnel of the entity or its parent

other related parties

Confirmation that related party transactions were made on terms equivalent to those that prevail in arm’s length transactions must be made if such terms can be substantiated.

k. Contingent liabilities

Unless the possibility of any outflow in settlement is remote, the reporting entity must disclose for each class of contingent liability at the statutory closing date a brief description of the nature of the contingent liability and, where practicable:

i. an estimate of its financial effect



ii. an indication of the uncertainties relating to the amount or timing of any outflow

iii. the possibility of any reimbursement

l. Events after the balance sheet date

Material non-adjusting events after the balance sheet date must be disclosed (including the nature of the event and an estimate of its financial effect, or a statement that such an estimate cannot be made).

a. fixed-term borrowing approaching maturity without realistic prospects of renewal or repayment

b. substantial operating losses

c. discovery of material fraud or errors that show the financial statements are incorrect

d. management determining that it intends to liquidate the entity or to cease trading, or that it has no realistic alternative but to so do

e. player transactions where the amounts paid or received are significant

f. transactions relating to property – for example, in relation to the club’s stadium

m. Other disclosures

i. Agents’ fees

The total amount of payments made to or for the benefit of an agent must be disclosed.

ii. Players’ economic rights (or similar)

For any player for whom the economic rights or similar are not fully owned by the licence applicant, the name of the player and the percentage of economic rights or similar held by the licence applicant at the beginning of the period (or on acquisition of the registration) and at the end of the period must be disclosed.

iii. Tax expense

The components of tax expense must be disclosed separately. That is, the aggregate tax amount must be equal to the tax data of the profit or loss statement.

Iv. Miscellaneous

Any additional information or disclosure that is not presented on the face of the balance sheet, profit and loss account or cash flow statement, but is relevant to an understanding of any of those statements and/or is required to meet the minimum financial information requirements, must be disclosed.

2. Notes to the financial statements consist as a minimum, of:

a) a statement that the same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements or, if those policies or methods have been changed, a description of the nature and effect of the change;

b) disclosure of any events or transactions that are material to an understanding of the current interim period.



3. Those mandatory content elements defined in this point “E” in relation to which the Licence Applicant/Licensee decides that their disclosure would create a competitive disadvantage for the Licence Applicant/Licensee, in which case they may also be submitted to administration in a separate document during the core procedure providing that it does not infringe Act C of 2000 on Accounting or the accounting policy of the Licence Applicant.

F. Business Report

1. The annual financial statements must include a financial review or commentary by management (Business Report) that describes and explains the main features of the Licensee’s financial performance and financial position and the principal risks and uncertainties it faces.

2. The annual financial statements must also include the names of persons who were members of the executive body, or board of directors, and of the supervisory bodies of the reporting entity at any time during the year.



Annex 3: Basis for the preparation of f inancial statements

A) Basic Principles

1. The annual financial statements referred to in F.01 (47.) must be prepared in compliance with the provisions of Act C of 2000 on Accounting.

2. The financial statements must be prepared on the assumption that the Licence Applicant is a going concern, meaning that it will continue its operation for the foreseeable future and that it will not go into liquidation (going concern).

3. The annual financial statements must be prepared in compliance with the principles laid down in Act C of 2000 on Accounting.

4. The annual financial statements must be signed by the authorised signatory.

B) Consolidation requirement

1. If the Licence Applicant has controlling influence over any subsidiary and is obliged to prepare consolidated financial statements with the subsidiary, then the consolidated financial statements must be prepared and submitted to the Licensor as if the legal entities involved in the consolidation were one single company.

2 If the Licence Applicant is controlled by a parent company and is obliged to prepare consolidated financial statements, then the consolidated financial statements must be prepared and submitted to the Licensor as if the legal entities involved in the consolidation were one single company.

If the Licence Applicant is an economic organisation acquiring the right to participate by way of transfer, it must submit to the Licensor the financial statements of both the company and registered member (e.g., combined or consolidated financial statements as if they were one single company).

C) Accounting requirements for player registrations

1. Notwithstanding that the Licence Applicant has to prepare audited annual financial statements under Act C of 2000 on Accounting, these regulations include a specific accounting requirement for player registrations carried as intangible fixed assets as set out in F.01 (47.) and F.02 (48.)

2. Licence Applicants that capitalise the costs of acquiring a player’s registration must apply certain minimum accounting requirements as described in paragraph 4 and prepare a player identification table as described in part D of this Annex

3. If a Licence Applicant has an accounting policy to expense the costs of acquiring a player’s registration rather than capitalise them, and this is permitted under their national accounting practice, there is no requirement for such entities to apply the minimum accounting requirements set out below and they do not have to prepare restated figures (except for any adjustments necessary in order to comply with the minimum accounting requirement set out in paragraph 5(b) below).

4. The minimum accounting requirements for Licence Applicants that capitalise the

costs of acquiring a player’s registration are as follows:



a. In respect of each individual player’s registration, the depreciable amount must be allocated on a systematic basis over its useful life; this is achieved by the systematic allocation of the cost of the asset as an expense over the period of the player’s contract.

b. Only direct costs of acquiring a player’s registration can be capitalised. c. The carrying value of an individual player must not be revalued upwards,

even though management may believe market value is higher than carrying value. The Licence Applicant must not include the locally trained players as value in the balance sheet as only the cost of players purchased can be capitalised.

d. Amortisation must begin when the player’s registration is acquired, i.e., depreciation may always be calculated only with the straight line method. Amortisation ceases when the player is classified as held for sale or when the player is derecognised (i.e., the registration is transferred to another club).

e. All capitalised player values must be reviewed each year. If the market value of a player is lower than book value, difference must be accounted as a loss.

5. The minimum accounting requirements for the disposal of a player’s registration are as follows:

a) The revenue from the disposal of a player’s registration to another club to be recognised in the profit and loss account is the difference between the disposal proceeds and the residual carrying value of the player’s registration in the balance sheet as at the date of the transfer.

b) Any profit in respect of a player for whom the Licence Applicant retains the registration must not be recognised in the profit and loss account. For the avoidance of doubt, any profit arising from the disposal of economic rights or similar of a player to any other party must be deferred, and a profit can only be recognised in the profit and loss account following the permanent transfer of a player’s registration to another club.

5. The Licence Applicant must prepare supplementary information (to be submitted to

the Licensor) if the accounting requirements described in this Annex are not met by the disclosures and accounting treatment in the audited annual financial statements. The supplementary information must include a restated balance sheet, profit and loss account and any associated notes to meet the requirements set out above. There must also be included a note (or notes) reconciling the results and financial position shown in the supplementary information document to those shown in the audited financial statements (that were prepared under the national accounting practice). He restated financial information must be assessed by the auditor by way of agreed-upon procedures.

D) Player identification table

1. As specified under C(2) above, Licence Applicants that capitalise costs relating to the acquisition of a player’s registration must prepare a player identification table.



2. The minimum information for the content of the player identification table in respect of each relevant player’s registration held up to the closing date of the last set of financial statements is as follows:

a. name and date of birth b. start and end date of contract c. the direct costs of acquiring the player’s registration d. impairment opening and closing value e. impairment accounted in the period f. unscheduled impairment cost in the period g. disposals (cost and accumulated amortisation); h. net book value i. profit/loss from disposal player’s registration

3. The relevant players about whom details are required in the table are all those players whose registration is held by the Licence Applicant at any time during the period and in respect of whom some direct acquisition cost has been incurred (at some point in time in the period or prior periods).

4. The following aggregate figures in the player identification table must be reconciled to the relevant figures in the balance sheet and profit and loss account in the audited annual financial statements:

a. the aggregate of the amortisation of player registrations in the current period as shown in the player identification table must agree with/be reconciled to the ‘Amortisation of player registrations’ (disclosed on the face of, or in a note to, the profit and loss account for the period),

b. the aggregate of impairment provisions made in the current period as shown in the player identification table must agree with/be reconciled to the ‘Impairment of player registrations’ (disclosed on the face of, or in a note to, the profit and loss account for the period),

c. the aggregate of profit/(loss) on disposal of player registrations in the player identification table must agree with/be reconciled to the ‘Profit/(loss) from disposal of player registrations’ (disclosed on the face of, or in a note to, the profit and loss account for the period)

d. the aggregate of the net book value of player registrations in the player identification table must agree with/be reconciled to the figure for ‘Intangible assets – players’ in the balance sheet (on the face or in the notes thereto) for the period end

5. For Licence Applicants who have restated player accounting figures to meet the accounting requirements of these regulations, these aggregate figures from the player identification table must agree with/be reconciled to the restated figures in the supplementary information.



Annex 4: Notion of overdue payables

1. Payables are considered as overdue if they are not paid according to the agreed terms.

2. Payables are not considered as overdue, within the meaning of these regulations if the Licence Applicant/Licensee (i.e. debtor club) is able to prove that on 31 March in respect to criteria stated in F.03 (48.)) and F.03 (48.) and on 30 June and 30 September in relation to criteria stated in Annex 10 (2)(3) (98. )

a. it has paid the relevant amount in full b. it has concluded an agreement which has been accepted in writing by the

creditor to extend the deadline for payment beyond the applicable deadline (note: the fact that a creditor may not have requested payment of an amount does not constitute an extension of the deadline).

c. it has brought a legal claim which has been deemed admissible by the competent authority under national law or has opened proceedings with the national or international football authorities, UEFA, FIFA or relevant arbitration tribunal contesting liability in relation to the overdue payables. However, if the decision-making bodies (Licensor and/or UEFA Club Financial Control Body) consider that such claim has been brought or such proceedings have been opened for the sole purpose of avoiding the applicable deadlines set out in these regulations (i.e. in order to buy time), the relevant amount will still be considered as an overdue payable.

d. it has contested to the competent authority under national law, the national or international football authorities or the relevant arbitration tribunal, a claim which has been brought or proceedings which have been opened against it by a creditor in respect of overdue payables and is able to demonstrate to the reasonable satisfaction of the relevant decision-making bodies (Licensor and/or UEFA Club Financial Control Body) that it has established reasons for contesting the claim or proceedings which have been opened. However, if the if the decision-making bodies (Licensor and/or UEFA Club Financial Control Body) consider the reasons for contesting the claim or proceedings which have been opened as manifestly unfounded the amount will still be considered as an overdue payable.



Annex 5: Licensor’s assessment procedures for the financial criteria and

requirements

A. Principle

The assessment processes to check compliance with the financial criteria comprise specific assessment steps that must be followed by the Licensor as set out below.

B. Assessment of the auditor’s report on the annual and interim financial statements

1. In respect of the annual and interim financial statements, the Licensor must perform the following minimum assessment procedures:

a. assess whether the selected reporting entity/entities is appropriate for club licensing purposes

b. assess the annual and interim financial statements that may also include supplementary information submitted to form a basis for his licensing decision

c. read and consider the annual and interim financial statements and the auditor’s report thereon

d. Address the consequences of any modifications to the auditor’s report (compared to the normal form of unqualified report) and/or deficiencies compared to the minimum disclosure and accounting requirements according to paragraph 2 below.

2. Having read the auditor’s report on the annual and interim financial statements, the Licensor must assess it according to the items below:

a. If the auditor’s report has an unqualified opinion, without any modification, this provides a satisfactory basis for granting the licence.

b. If the auditor’s report has a disclaimer of opinion or an adverse opinion, the licence must be refused, unless a subsequent audit opinion without disclaimer of opinion or adverse opinion is provided (in relation to another set of financial statements for the same financial year that meet the minimum requirements) and the Licensor is satisfied with the subsequent audit opinion

c. If the auditor’s report has, in respect of going concern, either an emphasis of matter or a qualified ‘except for’ opinion, the Licence Applicant must present additional documentary evidence demonstrating the Licence Applicant’s ability to continue as a going concern until at least the end of the licence season has been provided to, and assessed by, the Licensor to his satisfaction. The documents contain the future financial information prepared in compliance with Article F.06.1 (49.) and other evidence.

d. If the auditor’s report has, in respect of a matter other than going concern, either an emphasis of matter or a qualified ‘except for’ opinion, then the Licensor must consider the implications of the modification for club licensing purposes. The licence must be refused unless additional documentary evidence is provided and assessed to the satisfaction of the Licensor. The additional evidence that may be requested by the Licensor will be dependent on the reason for the modification to the audit report.

e. If the auditor’s report makes a reference to any situation defined in paragraph 5 of F.05 (48.) the licence must be refused.



3. If the Licence Applicant provides supplementary information the Licensor must additionally assess the auditor’s report on the agreed-upon procedures in respect of the supplementary information. The licence may be refused if this includes reference to errors and/or exceptions found.

C. Assessment of overdue payables towards other clubs

1. In respect of the overdue payables towards other clubs, the Licensor may decide on the following:

a. To assess himself the information submitted by the Licence Applicant, in which case he must perform the assessment according to paragraph 2 below;

b. To have independent auditors carry out the assessment procedures, in which case he must review the auditor’s report and, in particular, verify that the sample selected by the auditor is satisfactory, and he may carry out any additional assessment he believes necessary, i.e. extend the sample and/or request additional documentary evidence from the Licence Applicant

2. If the assessment is done by the Licensor, he must assess the information submitted by the Licence Applicant, in particular the transfer payables table and corresponding supporting documents, as detailed below. If the assessment is done by an auditor, the Auditor must perform the same steps:

a. Reconcile the total in the transfer payables table to the ‘Accounts payable relating to player transfers’ amount in the annual or interim financial statements as at the closing day of the annual report. b. Check the mathematical accuracy of the transfer payables table. c) Select all or a sample of player transfers/loans, compare the corresponding agreements with the information contained in the transfer payables table and highlight the selected transfers/loans. d. Select all or a sample of transfer payments, compare them with the information contained in the transfer payables table and highlight the selected payments. e. If, according to the transfer payables table, there is an amount due as at 31 March, that concerns a transfer that occurred before 31 December of the previous year, examine that by 31 March at the latest

i. an agreement has been reached as per Annex 5 (2 b); or ii. A dispute/claim has arisen as per Annex 5 (2 c or d).

f. Examine all or a selection of bank statements in support of payments. g. If applicable: obtains documents and examines them. (E.g., agreements with the relevant football club(s) and/or correspondence with the competent body, in support of e(i) and/or e(ii) above.)

3. Payables are those amounts due to football clubs as a result of transfer activities,

including training compensation and solidarity contributions as defined in the FIFA

Regulations on the Status and Transfer of Players, as well as any amount due

upon fulfilment of certain conditions.

The Licence Applicant must prepare and submit to the Licensor a transfer payables table

even if there have been no transfer/loans during the relevant period.

The Licence Applicant must disclose all transfer activities (including loans) undertaken up

to 31 December, irrespective of whether there is an amount outstanding to be paid at 31



December. In addition, the Licence Applicant must disclose all transfers subject to a claim

pending before the competent authority under national law or proceeding spending before a

national or UEFA/FIRA, or arbitration tribunal.

The transfer payables table must contain the following information as a minimum (in

respect of each player transfer, including loans)

a. player (identification by name or number)

b. date of the transfer/loan agreement

c. the name of the football club that formerly held the registration

d. transfer (or loan) fee paid and/or payable (including training compensation and solidarity contribution) even if payment has not been requested by the creditor

e. other direct costs of acquiring the registration paid and/or payable

f. amount settled and payment date

g. the balance payable at 31 December and the due date

h. any payable as at 31 March (rolled forward from 31 December) including the due date and the explanatory comment

i. conditional amounts (contingent liabilities) not yet recognised in the balance sheet as of 31 December

The Licence Applicant must reconcile the total liability as per the transfer payables table as

at 31 December to the figure in the financial statements balance sheet for ‘accounts

payable relating to player transfers’ or to the underlying accounting records. The Licence

Applicant may include also payables that are not yet overdue in the table.

The transfer payables table must be approved by Licence Applicant and this must be

evidenced by a brief statement and signature on behalf of the management.

D. Assessment of overdue payables towards employees and social/tax authorities

1. In respect of the overdue payables towards employees and social/tax authorities, the Licensor may decide on the following.

a. To assess himself the information submitted by the Licence Applicant, in which case he must perform the assessment according to paragraph 2 below;

b. To have independent auditors carry out the assessment procedures, in which case he must review the auditor’s report and, in particular, verify that the sample selected by the auditor is satisfactory, and he may carry out any additional assessment he believes necessary, i.e. extend the sample and/or request additional documentary evidence from the Licence Applicant

2. The Licensor must assess the information submitted by the Licence Applicant, in particular the list of employees and other corresponding supporting documents, as detailed below. If the assessment is done by an auditor, the Auditor must perform the same steps:

a. Obtain the list of employees prepared by management b. Reconcile the total payable in the list of employees to the ‘Accounts payable to

employees’ amount in the annual or interim financial statements. Check the mathematical accuracy of the calculated fields of the employee list.

c. Obtain and inspect all or a randomly selected sample of employee confirmation letters and compare the information to that contained in the list of employees.



d. If, according to the Licensor, there is an amount due as at 31 March that refers to payables in respect of contractual and legal obligations towards its employees that arose before the previous 31 December, examine that, by 31 March at the latest:

i. An agreement has been reached as per Annex 5 (2 b); or ii. A dispute/claim has arisen as per Annex 5 (2 c or d).

e. Selects a transfer and compares it to the information in the list of employees f. If applicable: obtains documents and examines them. E.g., agreements with the

relevant employee(s) and/or correspondence with the competent body, in support of the representations under d(i) and/or d(ii) above.

3. The Licensor must assess the information submitted by the Licence Applicant, in particular the social/tax table and other corresponding supporting documents, as detailed below. If the assessment is done by an auditor, the Auditor must perform the same steps:

a) Obtain the table of the debts to the social/tax authorities, prepared by management, which must contain at least the following information:

i) Name of the authority applying the claim; ii) The total of payable(s) as at 31 December of the last closed

economic year, indicating also the deadline for the payment; iii) The total amount of the payable(s) as at 31 March of the year that

follows last closed economic year, indicating also the payment deadline for each item;

iv) Supporting information for what is stated in the above categories. b) Reconcile the total payable in the social/tax table to the ‘Accounts payable to

social/tax authorities’ amount in the annual or interim financial statements as at 31 December.

c) Obtain corresponding supporting documents. d) If, according to the Licensor, there is an amount due as at 31 March that

refers to payables towards social/tax authorities in respect of contractual and legal obligations towards employees that arose before the previous 31 December, examine that, by 31 March at the latest;

‒ agreement has been reached as per Annex VIII (2 b); or ‒ a dispute/claim has arisen as per Annex VIII (2 c or d).

e) Examine all or a selection of bank statements in support of payments. f) If applicable: examine documents, including agreements with the relevant

social/tax authorities and/or correspondence with the competent body, in support of the representations under d(i) and/or d(ii) above.

4. Amounts payable to people who, for various reasons, are no longer employed by the

applicant fall within the scope of this criterion and must be settled within the period

stipulated in the contract and/or defined by law, regardless of how such payables are

accounted for in the financial statements.

The term “employees” includes the following persons:

a. all professional players according to the applicable FIFA Transfer Regulations;

b. contracted and employed staff specified in points P.01-P.20 of these Club Licensing Regulations;



c. contracted partners of the Licence Applicant/licensee subcontractor

The Licence Applicant must prepare a table showing all employees who were employed at

any time during the financial year prior to the season subjected to the core licensing

procedure; i.e. not just those who remain at year end. This table must be submitted to the

Licensor.

The following information must be given, as a minimum, in respect of each employee:

a. name of the employee

b. position/function of the employee

c. start date of the employment

d. end date of employment (if applicable)

e. the balance payable as at 31 December, due date

f. any payable as at 31 March (rolled forward from 31 December) including the due date and the explanatory comment

The transfer payables table must be approved by Licence Applicant and this must be

evidenced by a brief statement signed on behalf of the management.

The Licence Applicant must reconcile the total liability as per the transfer payables table as

at 31 December to the figure in the financial statements balance sheet for ‘accounts

payable relating to employees’ or to the underlying accounting records.

The Licence Applicant must submit to the auditor and/or the Licensor the documents

required for evidence showing the amount payable, as at 31 December of the year prior to

the season to be subjected to a core licensing procedure and as at 31 March (from the

balance of 31 December), to the competent social/tax authorities.

E. Assessment of the written representation letter

1. In respect of the written representation letter, the Licensor must read and consider the impact of any significant change that has occurred in relation to the licensing criteria by assessing the annual financial statements, the future financial information and other documents submitted by the Licensor.

2. The Licensor must also consider whether the Licensee will be able to continue as a going concern until at least the end of the licence season. The licence must be refused if, based on the financial information that the Licensor has assessed, in the Licensor’s judgement, the Licence Applicant may not be able to continue as a going concern until at least the end of the licence season.

3. The Licensor must assess the club’s ability to continue as a going concern until at least the end of the licence season. The licence must be refused if, based on the financial information that the Licensor has assessed, in the Licensor’s judgement, the Licence Applicant may not be able to continue as a going concern until at least the end of the licence season.



4. If the Licence Applicant (or the registered member of the UEFA member association which has a contractual relationship with the Licence Applicant within the meaning of Article 5.(3) (17) or any parent company of the Licence Applicant included in the reporting perimeter is/was seeking protection or has received/is still receiving protection from its creditors pursuant to laws or regulations (including voluntary or mandated administration procedures) within the 12 months preceding the licence season then the licence must be refused. For the avoidance of doubt the licence must also be refused even if the concerned entity is no longer receiving protection from its creditors at the moment the licensing decision is taken.

F. Assessment of the future financial information

1. In respect of the future financial information the Licensor must assess whether or not “Indicator 1”, defined in Article 20/C. (51.) has been breached. If any indicator has been breached, the Licensor must assess the future financial information as defined in paragraph 2 below.

2. The assessment procedures, which may be carried out by an auditor, must include, as a minimum, the following:

1. check whether the future financial information is arithmetically accurate 2. through discussion with management and review of the future financial

information, determine whether the future financial information has been prepared using the disclosed assumptions and risks

3. check that the opening balances contained within the future financial information are consistent with the balance sheet shown in the audited annual financial statements

4. check that the future financial information has been formally approved and signed by the management

5. if applicable: examine corresponding supporting documents, including for example agreements with sponsors, banking facilities, share capital increase, bank guarantees and minutes of the board;

6. assess the club’s ability to continue as a going concern until at least the end of the licence season (i.e. the licence must be refused if, based on the financial information that the Licensor has assessed, in the Licensor’s judgement, the Licence Applicant may not be able to continue as a going concern until at least the end of the licence season).

G. Assessment of overdue payables - enhanced

1. In respect of the enhanced overdue payables requirements (towards football clubs, employees and social/tax authorities) the Licensor must perform, as a minimum, the following assessment procedures:

a) read the Licensee’s completed payables information and make enquiries to the Licensee if there is any information that may be incomplete and/or inaccurate based on the Licensor’s existing knowledge of the Licensee from club licensing and/or other reasonable information sources;



b) in relation to the transfer payables information, verify the completeness of the list of players submitted with the information already disclosed for the purpose of players’ registrations for the period between 1 July of the year preceding the licence season and the assessment date.

H. Assessment of break-even information

1. In respect of the break-even information the Licensor must assess whether or not the financial information submitted by the Licensee corresponds to the information in respect of the same reporting entity/entities submitted for club licensing purposes.

2. The assessment procedures, which may be carried out by an auditor, must include, as a minimum, the following:

a. check whether the break-even information is arithmetically accurate

b. check that the balances contained within the break-even information are consistent with the balances contained in the audited financial statements, supplementary information or underlying accounting records

c. check that the break-even information has been formally approved by the executive body of the Licensee.

The Licensor must verify to the UEFA Club Financial Control Body the results of the above assessment procedures.

3. The Licensor must confirm to the UEFA Club Financial Control Body the results of the above assessment procedure.

Annex 6: Calculation of the break-even result

Title 1.

A. Summary of the calculation of the break-even result

1. The break-even result is calculated as follows: relevant income minus relevant expenses.

2. The relevant income is the sum of the following (see title 2 for the details):

a) Income – gate income b) Income – sponsorship and advertisements c) Income – broadcasting rights d) Income – Commercial activities e) Income – Other operating income f) Income from the registration of players to other teams g) Additional income from the sale of tangible assets h) Financial income

The relevant income decreases if any of the following is included in the items listed in the above sections a) – h) (detailed in title 2):

i) Non-monetary loans j) Income derived from transactions effected with related parties (if it exceeds the

market price)

k) Income not related to the club or football.

3. The relevant expenses are calculated as follows (see title 3 for details):

a. Expenses – cost of goods sold



b. Expenses – payroll expenditures c. Expenses – other operating expenses b) Depreciation / impairment of and losses related to the registration or acquisition

of players c) Financial expenditures and dividends

The relevant expenses increase if the items listed above contain any of the following (see title 3 for details):

a) that part of expenses incurred from transactions effected with related parties which is below the market price;

The relevant expenses decrease if any of the following is included in the items listed in the above sections a) – e) in paragraph 3):

a) expenses related to youth teams; b) community development expenses; c) non-financial receivables / costs; d) financial expenditures directly related to the creation of tangible assets; e) expenses not related to the club or football.

B. Relevant income

1. Definition of relevant income elements

a) Income – gate income

Proceeds of the sale of all daily tickets and passes that authorise the buyers to watch national championships (league and cup), UEFA competitions, and other matches (friendly matches and tournaments). This category includes membership fees as well.

b) Income – sponsorship and advertisements

Income received from the main sponsor and other sponsors, as well as the income derived from the placement of pitch-perimeter boards / advertising, as well as other sponsorship and advertisement income.

c) Income – broadcasting rights

Income from the sale of broadcasting rights for national (league and cup) matches and UEFA matches, and other competitions (friendly matches and tournaments) to television and radio channels as well as new and other media.

d) Income – Commercial activities

Income (not belonging to any other category) from merchandising, food and drinks, conferences, from betting games, and from other commercial activities.

e) Income – Other operating income

All other operating income not listed above, including subsidies, rental, dividends, and activities not related to football.

f) Income from the registration of players to other teams

The calculation of the relevant income depends on the club’s method of booking the items connected to the registration of a player – whether the financial records show (i) the profit, or (ii) the revenue derived from the sale of the player. This depends on the following aspects:

i) In the case of a club booking the registration of players according to the “capitalisation and amortisation” method, the profit of the registration is calculated by deducting the net book value of the player



upon the transfer from the net income of the sales (the income realised and to be realised later).

The profit on disposal of a player’s registration is reported if the net sales income exceeds the net book value of the player upon the transfer. Any such profit must be included in the relevant income used for the calculation of the break-even result.

ii) If the club books the registration of a player according to the “income and expense” method, the income from the sale of a player’s registration equals the net income received when the player joins another club. The new income must equal the financial revenue resulting from the sale of the player’s registration.

For the purposes of break-even result calculation:

iii) In the case of clubs applying the “capitalisation and amortisation” method in their annual financial statements in connection with the registration of players, the relevant income and expenses must reflect that book-keeping procedure.

iv) Clubs applying the “income and expense” method in their annual financial statements in connection with the registration of players may decide either for the “income and expense” method or the “capitalisation and amortisation” method. The chosen method must be applied consistently, throughout the year.

g) Additional income from the sale of tangible assets

The profit derived from selling tangible assets (including among others facilities and training rooms of a club) in the monitoring period must not be included in the break-even result, except in the following two cases:

i) if the tangible asset (other than facilities and training rooms) were not replaced, then the profit of the sale as stated in the profit and loss statement can be included in the relevant income up to the difference between the proceeds of the sale and the book value of the asset (as shown in the annual report under tangible assets).

ii) if the club proves that the tangible asset sold is replaced, then the profit of the sale as shown in the profit and loss statement can be included in the relevant income

a) up to the difference between the proceeds of the sale and the total cost of the replacement asset booked under tangible assets in the annual report;

b) up to the difference between the proceeds of the sale and the present value of the leasing of the replaced tangible asset for at least 50 years (if the replacement asset is used by the club based on a leasing or rental agreement).

h) Financial income

Financial income means the interest gained from the usage of a legal person’s tangible assets by others.

i) Non-monetary income

Non-monetary income may be omitted from the break-even result calculation with the appropriate adjustments. Non-monetary items are those that are not defined as cash items. Cash items are those that can be expressed in money units i.e.



assets acquired and liabilities paid for/in a fixed or determinable number of money units. The main feature of cash items is the right to purchase (or the obligation to hand over) them for a fixed or determinable number of money units.

Non-monetary items include the following:

• revaluation of tangible and intangible goods

• revaluation of inventories

• reversed depreciation and amortisation of fixed assets (including the registration of players)

• currency conversion gain / loss on non-monetary items

j) Income of transactions effected with related parties above the market price

For the calculation of the break-even result, the licensee must define the fair value of every transaction effected with a related party. If this estimated value differs from the book value, the relevant income must be adjusted accordingly. However, the relevant income must not be adjusted upwards.

Examples for transactions with related parties where the licensee must prove the estimated fair value of the transaction:

• sale of sponsorship rights to a related party of the club

• sale of VIP tickets or transfer of the right of using VIP boxes to a related party of the club;

• any transaction with a related party involving the provision of goods or services to the club

Examples for transactions with related parties which require adjustment (i.e. must always excluded from the relevant income):

• non-refundable money received from a related party; and

• assumption of obligations on behalf of the club, by a related party

Contributions by related parties may only be added to the relevant income after the required adjustments (according to Annex 10 (5)) which is part of the assessment of the break-even result (Annex 7).

See title 2 for the definition of “related party”, “transactions effected with related parties”, and the “fair value of transactions effected with related parties”.

k) Income not related to the club or football.

Income (and expenses – see titles 3) must only be excluded from the calculation of the relevant income if they are clearly and certainly unrelated to the name, activity and place of the club.

Examples for activities with which the relevant income and expenses do not need to be adjusted, even though they are shown in the annual report as unrelated to football:

• hotels, restaurants, conference rooms, shops (rented out), medical centres, or other sport teams’ facilities operated at the club’s facility or training room / field; and

• activities for which the club’s name is used.

C. Relevant expenses

Definition of the elements of relevant expenses

a) Expenses – cost of goods sold



The cost of goods sold includes all activities, such as supplies, sale of goods, medical provisions, equipment and sport goods.

b) Expenses – payroll expenses

All remuneration of employees, including directors and managers, provided during the period.

Payroll expenses include among others short-term payments to and in connection with employees (e.g. salaries and wages, social security contributions, profit sharing and bonuses), non-monetary provisions (e.g. medical services, accommodation, company cars, as well as all goods provided free of charge or at a discount), provisions payable after the performance of specific work, as well as other long-term provisions, severance payments, and participation-based payments.

c) Expenses – other operating expenses

This category contains all other operating expenses, such as those related to football matches, as well as rent, administrative and other general costs, as well as cots not related to football. Pursuant to the minimum requirements defined in annex 4, the depreciation, amortization and revaluation of fixed assets must not be booked under “other operating expenses”; they must be indicated in the profit and loss statement separately.

d) Depreciation / impairment of and losses related to the registration or acquisition of players

The calculation of the relevant expense connected to the registration of players depends on the booking method, i.e. the club books either (i) the depreciation / impairment of players and the losses arising from the registration of players, or (ii) the costs of acquiring a player. The following rules must be observed:

i) the loss arising from the registration of a player is calculated by deducting the net book value of the player upon registration from the net proceeds of the sale (the income realised and to be realised in future).

The loss of registering a player is booked if the net proceeds of the sale is lower than the player’s net book value upon registration. Any such loss must be booked under the expenses used for the calculation of the break-even result.

ii) If the registration of players is booked according to the “income and expense” method in the annual report, the costs of acquiring the players must be booked in the monitoring period.

For the purposes of break-even result calculation:

iii) If a club books the registration of players according to the “capitalisation and amortisation” method in its balance sheet, the relevant income and expenses must reflect that accounting method.

iv) A club that books the registration of players according to the “capitalisation and amortisation” method in its balance sheet may decide either for the “income and expense” method or the “capitalisation and amortisation” method. The chosen method must be applied consistently throughout the year, for subsequent periods.

e) Financial expenditures and dividends



These include interest expenditures and other costs related to loans taken out by the licensee, including the interest of bank overdraft facilities and other loans (from banks or other lenders), as well as leasing charges.

Dividend is the yield of capital investment, paid to the owners. If the dividend is shown in the annual report, its amount must be taken into consideration in the calculation of relevant expenses, whether or not the dividend is booked in the profit and loss statement or a similar report.

f) Expenses of transactions effected with related parties below the market price

For the calculation of the break-even result, the licensee must define the fair value of every transaction effected with a related party. If this estimated value differs from the booked value, the relevant expenses must be adjusted accordingly. However, the relevant expenses must not be adjusted downwards.

g) Expenses related to youth teams

Expenses related to youth teams may be omitted from the break-even result calculation with the appropriate adjustments. Such expenses are directly related to the club’s youth teams programme (training, education and development of young athletes), i.e. they could have been avoided if the club had not undertaken to perform such activities. The category also includes the net income received by the club which is directly used for youth teams. Net revenues of the club which may be directly included in the youth team education programme. The licensee may omit expenses related to youth teams from the relevant expenses because of the objective of promoting investments and expenditures related to facilities and activities (for the long-term development of the club).

Amongst others, the following activities are related to youth teams:

i) organisation of a youth team;

ii) participation of a youth team in national, regional or local tournaments and programs acknowledged by the member association (Hungarian Football Association);

iii) football training program for various age groups (e.g. techniques, tactics, physical skills);

iv) teaching of the game rules;

v) medical provisions to young players;

vi) organisation of training not related to football.

Among others, the following costs may be directly charged to (deducted from) income:

vii) Costs of materials and services used in connection with the development of youth teams, such as costs of accommodation, medical services, education, travel, daily fees, equipment, clothing, and facility rental;

viii) Provisions for employees involved in the development of youth teams (apart from the players themselves) and the related expenses. Such employees include the head of the youth team development department and coaches pursuant to Article 18. (37.). (P.09; P.10), if their employment is entirely aimed at operating and developing a youth team.

ix) Costs of provisions for youth team players (aged not older than 18 years) on the date of the licensee’s balance sheet. Expenses related to



youth team players aged 18 or older must not be excluded from relevant expenses.

If the legal person cannot separate its expenses for youth team development from other expenses, then such expenses shall be deemed not to have been spent on youth team development. In this respect, the following items are not deemed to be youth team development expenses:

x) Costs of observers of players

xi) Fees related to acquiring players, such as fees paid to an agent or another club;

xii) Sales, administrative and other fees that are usually not directly connected, unless they can be directly connected to youth team development;

xiii) Expenses related to provisions to employees who are involved in youth team development on a part-time basis only (e.g. a coach who is not dedicated to the youth team only);

xiv) Real estate or facility costs and/or the related depreciation (of tangible assets, including among others assets related to youth team development, which may be omitted from relevant costs anyway).

h) Social development expenses

Expenses related to social development may also be excluded from the calculation of the break-even result. They include items that are directly connected to so-called “activities for public good“ that promote sports and social development. (I.e. these expenses could have been avoided if the club had not undertaken to perform social development activities.)

Social development expenses include, among others, the following items:

i) education development;

ii) health improvement;

iii) promotion of social acceptance and equality;

iv) decreasing or preventing poverty;

v) promotion of human rights, conflict settlement, religious and racial harmony, equal chances, and diversity;

vi) development of amateur sports;

vii) promotion of environmental protection;

viii) helping those in need due to young or old age, illness, social disadvantages, financial problems or other reasons.

Costs that may be directly charged to (deducted from) expenses (among others):

ix) cost of materials and services used in connection with social developments;

x) costs of provisions to employees who are dedicated to social development work;

xi) donations to other legal persons, aimed at promoting sports and social development.

If the licensee cannot separate its expenses for social development from other expenses, then such expenses shall be deemed not to have been spent on



social development. In this respect, the following items are not deemed to be social development expenses:

xii) costs related to presentations, as well as administrative and other ancillary costs, unless they are directly connected to social developments;

xiii) provisions to employees who are involved in social development work on a part-time basis only (e.g. if a player is also involved in social development tasks).

xiv) real estate or facility costs and/or the related depreciation (of tangible assets, including among others assets related to social development, which may be omitted from relevant costs anyway).

i) Non-monetary expenses

I) With the required adjustments, non-monetary costs may also be omitted from the costs used for the calculation of the break-even result. See title 2 for the further guidance on non-monetary items.

j) Financial expenses directly related to the creation of tangible assets

The licensee may omit from the calculation of the break-even result any financial expense that is directly aimed at creating an asset to be used for the club’s football-related activities, which has been booked as a cost in the monitoring period, and which has not been capitalised as part of the historical cost of the asset until the asset is ready for usage.

The amount that may be adjusted is the actual interest expenditure (not yet capitalised), minus any investment income related to interest connected to the temporary investment of the borrowed amount. The relevant interest is calculated from the time when the legal person incurs an expense concerning the asset, or takes out a loan, and performs activities in preparation for the usage or sale of the asset (until the asset is realised).

Once the asset is created, all financial costs must be included in the break-even result calculations.

k) Expenses not related to the club or football.

Expenses (and income – see title 2) related to activities not connected to football (which are clearly unrelated to the club’s activity, location or name) may be omitted from the calculation of the relevant expenses.

The following expense types may be omitted from the break-even result calculation:

a) Depreciation / loss in the value of tangible assets

Planned distribution of the scheduled depreciation over the useful life of the capitalised gross value of the asset (decreased with the residual value). The useful life is the period over which the asset is expected to be available to and used by the licensee. Unscheduled depreciation is an amount in which the historical value of a tangible asset exceeds the net fair value that can be realised, i.e. the higher of the fair value minus the sale cost and the usage value.

The depreciation of tangible assets in the monitoring period may be omitted from the break-even result calculation because of the objective to encourage clubs to make long-term profits via investments and expenditures used for facilities or activities.



b) Depreciation and loss in the value of intangible goods other than the registration of players

Planned distribution of the scheduled depreciation over the useful life of the capitalised gross value of the asset (decreased with the residual value). The useful life is the period over which the asset is expected to be available to and used by the licensee. Unscheduled depreciation is an amount in which the historical value of the asset exceeds the fair value decreased by the cost of sale.

The depreciation of intangible goods (other than the registration of players) over the monitoring period may be omitted from the break-even result calculation. For the sake of clarity: the depreciation related to acquiring players in the monitoring period must be included in the break-even result calculation (see title 3).

c) Tax payment obligation

Tax payment obligations include all domestic and foreign taxes based on taxable profit. Taxable profit (loss) is the earnings in the monitoring period based on which tax is payable or may be claimed back.

The tax payment obligation is the sum of current and future taxes arising from transactions and events in the monitoring period.

The tax payment obligations do not contain VAT or taxes and contributions related to employees.

D. D. Contributions by related and affiliated companies

1. The acceptable deviation may only exceed EUR 5 million (including the amounts specified in Annex 10 (95.) in the financial period if the excess is fully covered by contributions by related or associated companies.

2. Owners’ contributions to payment for shares via the registered capital or capital reserve. In other words, investment into equity by a shareholder.

3. Contributions by related parties contain the following:

a) Capital contribution by a related party: an unconditional payment by a related party to the licensee in order to increase equity, without stipulating any repayment or other obligation in exchange. For example, a related party’s debt can be settled via a capital increase that raises equity; and/or

b) Income of transactions with related parties: the amount that may be taken into consideration as a contribution must not exceed the difference between the equivalent income in the monitoring period and the fair value of the transaction, as stated above in (1)(j) of part B on the calculation of the break-even result. The money must have been received from the related party; no declaration of intent or commitment is sufficient.

4. The following transaction types do not constitute contributions by owners or related parties:

i) positive change in net assets or liabilities arising from revaluation;

ii) balance or reserve increase without any contribution by an owner;

iii) a transaction in which the licensee is responsible for meeting an obligation or acting or performing in a certain manner;

iv) contributions by owners that constitute liabilities.



Title 2.

E. Related party, related party transactions, and fair value of related party transactions

A related party is a person or enterprise that is related to the legal person that compiles the annual report (“reporting legal person”). The person or the person’s close family member is deemed to be related to the reporting legal person if the person

a) exercises control over the reporting legal person;

b) can dominantly influence the reporting legal person;

c) is a member of the key management personnel of the reporting legal person or of a parent thereof.

An entity is related to the reporting legal person if any of the following conditions apply:

a) the entity and the reporting legal person are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

b) one entity is a related party of the other entity (or an associate or related party of a member of a group of which the other entity is a member);

c) Both legal persons are related parties of the same third party;

d) one legal person is a related party of a third entity, and the other legal person is a member of the third entity;

e) the legal person provides post-employment benefits to employees of either the reporting entity or an entity related thereto. If the reporting legal person provides such benefits itself, the sponsoring employers are also related to the reporting entity.

f) the legal person is controlled or jointly controlled by a person identified above; or

g) a person identified in the above paragraph has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

With regard to the above paragraph, the following definitions apply:

a) Close members of the family of a person are those family members who may, through their connections, be expected to influence the entity. They may include that person’s children and spouse or domestic partner, children of that person’s spouse or domestic partner, and dependants of that person or that person’s spouse or domestic partner.

b) Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

c) A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control.

d) Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.

e) Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.



f) Dominant influence is the power to participate in the financial and operating policy decisions of an entity, but is not control over those policies. Dominant influence may be gained by share ownership, statute or agreement.

g) A member is an entity, including non-legal persons such as a partnership, over which the investor has dominant influence and that is neither a subsidiary nor an interest in a joint venture. In the definition of a related party, a member includes subsidiaries of the member, and a joint venture includes subsidiaries of the joint venture. Therefore, for example, a member's subsidiary and the investor that has dominant influence over the member are related to each other.

In considering each possible related party relationship, attention is directed to the

substance of the relationship and not merely the legal form. The following are not related

parties:

a) two legal persons simply because they have a director or other member of key management personnel in common or because a member of key management personnel of one entity has dominant influence over the other entity.

b) two owners simply because they share joint control over a related party.

c) financial service providers, trade unions, entities for the public benefit, and local municipalities that do not control, jointly control or dominantly influence the reporting entity, simply by virtue of their normal dealings with an entity (even though they may affect the freedom of action of an entity or participate in its decision-making process).

d) a customer, supplier, franchisor, distributor or general agent with whom an entity transacts a significant volume of business, simply by virtue of the resulting economic dependence

A related party transaction is a transfer of inventories, services or obligations between

related parties, regardless of whether a price has been charged. (The minimum

requirements in respect of related parties and related party transactions are set out in

Annexes 2-7).

Transactions between related parties must be effected at fair value. Fair value is the

amount for which an asset could be exchanged, or a liability settled, between

knowledgeable willing parties in an arm’s length transaction. An arrangement or a

transaction is deemed to be ‘not transacted on an arm’s length basis’ if it has been entered

into on terms more favourable to either party to the arrangement than would have been

obtained if there had been no related party relationship.



Annex 7: Other factors to be considered in respect of the break-even

requirements

1. Other factors according to Article 68 to be considered by the UEFA Club Financial

Control Body include, but are not limited to, the following:

a) Level and trend of the break-even result

The higher a break-even deficit relative to a licensee’s relevant income, in a reporting period or in aggregate for a monitoring period, the less favourably it will be viewed. An improving trend in the annual breakeven results will be viewed more favourably than a worsening trend.

b) Impact of exchange rate movements

If exchange rates have changed such that there is an adverse impact on the licensee’s break-even result denominated in euros for a reporting period or in aggregate in a monitoring period, compared to the currency used by the licensee for its annual financial statements, then the level of the impact of changes in exchange rates will be taken into account.

c) Projected break-even result

If the projected break-even result for the reporting period T+1 foresees a surplus, it is likely to be viewed more favourably than if the break-even result for the reporting period T+1 foresees a deficit. As part of its considerations, the UEFA Club Financial Control Body may also request a licensee’s longer term business plan (for reporting periods covering T+2 and T+3) in order to better understand the strategy of the club.

d) Budgeting accuracy

A licensee’s break-even result for a reporting period may be compared to the ‘plan for compliance’ (i.e. budgeted break-even result) as previously submitted. If the budgeted break-even result is realistic and consistent with the past practice of the club, it will be viewed more favourably.

e) Indebtedness

Additional information may also be requested from a licensee in respect of its debt situation. This may include aspects such as the source of debt, the ability to service interest and principal payments, the debt covenant compliance and the maturity profile of the debt.

The UEFA Club Financial Control Body may evaluate among others the following debt ratios to assess the capital structure and the debt-servicing capability of a club:

i) degree of leverage – the level of debt relative to income and fixed assets;

ii) profitability and coverage – the level of income relative to debt service costs;

iii) cash flow adequacy – the capacity to cover both interest and principal repayments.

f) Force majeure

The UEFA Club Financial Control Body may also take into account extraordinary events or circumstances beyond the control of the club which are considered as a case of force majeure.

Regarding the first two monitoring periods (seasons 2013/14 and 2014/15), the

following additional transitional factors must be taken into consideration by the

UEFA Club Financial Control Body:

Players contracted before June 1, 2010



1. If a licensee reports an aggregate break-even deficit that exceeds the acceptable deviation and it fulfils both conditions described below then this would be taken into account in a favourable way.

i) i) It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance); and

ii) Ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such date would not be taken into account).

This means that a licensee that reports an aggregate break-even deficit that exceeds the acceptable deviation but that satisfies both conditions described under i) and ii) above should in principle not be sanctioned.

2. Regarding the first two monitoring periods (seasons 2013/14 and 2014/15), the following additional transitional factors must be taken into consideration by the UEFA Club Financial Control Body:

Players contracted before June 1, 2010

If a licensee reports an aggregate break-even deficit that exceeds the acceptable deviation and it fulfils both conditions described below then this would be taken into account in a favourable way.

i) It reports a positive trend in the annual break-even results (proving it has implemented a concrete strategy for future compliance); and

ii) It proves that the aggregate break-even deficit is only due to the annual break-even deficit of the reporting period ending in 2012 which in turn is due to contracts with players undertaken prior to 1 June 2010 (for the avoidance of doubt, all renegotiations on contracts undertaken after such date would not be taken into account).

This means that a licensee that reports an aggregate break-even deficit that exceeds the acceptable deviation but that satisfies both conditions described under i) and ii) above should in principle not be sanctioned.



Annex 8: Sport clubs: guide to mitigating the reporting obligations

This annex is only applicable to sport clubs that have achieved sufficient results to join the first national class in the licensed championship year, and apply for a corresponding club licence (NBI – see: Article 2.13.). This annex is not applicable to clubs applying for a UEFA club licence to participate in any UEFA tournament (see Article 2.13).

If a club moving into a higher category must enter the club license system, all of the criteria F.01 – F.07 are applicable to it, but some reporting obligations can be mitigated (relaxed). The reason is the following: if the licensee (a club applying for a license) used to operate outside the first class, it did not necessarily have to enter the club license system, so it may not have historical financial information that is suitable for the purposes of a club license.

The following financial criteria are mitigated (relaxed) in case of an upward moving club that requests a licence:

Regarding item F.01:

‒ the equity requirement is waived.

The indicators will not be applied to the future financial information

In the case of an upward moving licence applicant, sport, personnel and administrative criteria may also be mitigated. The criteria are deemed met if the club undertakes (in a declaration of intent) to meet the criteria if it manages to enter the higher class.

Nevertheless, a licence applicant entering a higher class must meet all the criteria necessary for an NB II club licence.

If a club that has newly joined class one does not drop out at the end of its first year in that class, it will no longer be deemed as a new entrant. After the end of the first year in the championship, the licensee/licence applicant will undergo the normal procedure without any mitigations.



Annex 9: Sports organisations Qualif ication requirements for football coaches

Annex to the Presidium Resolution

pertaining to the qualification requirements for football coaches and the further training

system

Qualification requirements for football coaches

From 15 July 2013 the coaches of all sports organisations operating in the competitions organised by MLSZ shall have the following minimum qualifications and licences.

Coaches operating at adult men’s football teams playing on full field

Licensed championship

Head coach Assistant

coach Goalkeeper coach

NB I championship

Each technical director and/or head coach and/or assistant coach must have an UEFA diploma and at least one of them has also UEFA PRO qualifications.

UEFA B diploma or MLSZ goalkeeper coach qualifications or UEFA Goalkeeper diploma or goalkeeper qualifications recognised by the national federation of any other UEFA member state

NB II championship UEFA A diploma

UEFA B diploma

UEFA B diploma or MLSZ goalkeeper coach qualifications or UEFA Goalkeeper diploma or goalkeeper qualifications recognised by the national federation of any other UEFA member state

NB III championship

UEFA B diploma

UEFA B diploma -------------------

County Division I. UEFA B diploma

------------------- -------------------

County Division II and lower divisions

MLSZ D diploma

------------------- -------------------

An assistant coach is any coach other than the head coach who performs the activities of a coach for a team (e.g., assistant coach, field coach, endurance coach, etc.) expect the goalkeeper coach. Those NBI sports clubs that apply for a UEFA club licence must continue to satisfy the coach qualifications criteria pursuant to the UEFA Club Licensing Regulations.



Coaches operating at adult men’s youth football teams playing on full field

Licensed

championship Youth head Coach

NB I championship UEFA PRO or UEFA

Elite Youth A diploma

UEFA A

diploma

NB II championship UEFA A diploma UEFA B

diploma

NB III championship ------------------- ------------

County Division I. UEFA B diploma UEFA B

diploma

County Division II and

lower divisions MLSZ D diploma

MLSZ D

diploma

Independent youth

team developing club UEFA A diploma

UEFA B

diploma

The requirements applicable to the various team managers operating at men’s youth football teams playing on full field shall be applied also to the professional managers of academies, unless any other special rules provide otherwise.

Coaches operating at adult and youth women’s football teams playing on full field

Licensed championship Coach

NB I championship UEFA B diploma

NB II championship MLSZ D diploma

Further training system

UEFA PRO diploma: It is mandatory to attend one licence renewal further training in three years.

UEFA A diploma: It is mandatory to attend one licence renewal further training in three years.

UEFA B diploma It is mandatory to attend one licence renewal further training in two years.

Other provisions



The above rules must be applied only to teams competing in MLSZ competitions. FIFA, UEFA, or MLSZ may establish different rules of the competition systems of these organisations.

For the purpose of meeting the above requirement, any UEFA accredited qualifications are acceptable for certifying compliance if its holder took part in the further training referred to in point 2. above and the licence has been extended.



Annex 10: Break-even and requirements pertaining to clubs taking part in UEFA tournaments

Requirements for the break-even point

(1) Notion of relevant income

a, Relevant income is defined as revenue from gate receipts, broadcasting rights, sponsorship and

advertising, commercial activities and other operating income, plus either profit on disposal of

player registrations or income from disposal of player registrations, excess proceeds on disposal

of tangible fixed assets and finance income.

b, It does not include any non-monetary items or certain income from non-football operations.

(2) Notion of relevant expenses

a, Relevant expenses is defined as cost of sales, employee benefits expenses and other operating

expenses, plus either amortisation or costs of acquiring player registrations, finance costs and

dividends. It does not include depreciation/impairment of tangible fixed assets,

amortisation/impairment of intangible fixed assets (other than player registrations), expenditure

on youth development activities, expenditure on community development activities, any other

non-monetary items, finance costs directly attributable to the construction of tangible fixed assets,

tax expenses or certain expenses from non-football operations.

b, Relevant income and expenses must be calculated and reconciled by the Licensee to the annual

financial statements and/or underlying accounting records, i.e. historic, current or future financial

information as appropriate.

c, Relevant income and expenses from related parties must be adjusted to reflect the fair value of

any such transactions.

d, Relevant income and expenses are further defined in Annex 7 .

(3) Notion of monitoring period

a, A monitoring period is the period over which a Licensee is assessed for the purpose of the break-

even requirement. As a rule it covers three reporting periods:

‒ the reporting period ending in the calendar year that the UEFA club competitions

commence (hereinafter: reporting period T), and

‒ the reporting period ending in the calendar year before commencement of the UEFA club

competitions (hereinafter: reporting period T-1), and

‒ the preceding reporting period (hereinafter: reporting period T-2)

As an example, the monitoring period assessed in the licence season 2015/16 covers the

following 3 reporting periods ending in 2015 (reporting period T), 2014 (reporting period T-1) and

2013 (reporting period T-2).

b, By exception to this rule, the first monitoring period assessed in the licence season 2013/14

covers only two reporting periods, i.e. reporting periods ending in 2013 (reporting period T) and

2012 (reporting period T-1).

(4) Notion of break-even result

a, The difference between relevant income and relevant expenses is the break-even result, which



must be calculated in accordance with Annex 7 for each reporting period.

b, If a Licensee’s relevant expenses are less than relevant income for a reporting period, then the

club has a break-even surplus. If a club’s relevant expenses are greater than relevant income for

a reporting period, then the club has a break-even deficit.

c, If a Licensee’s financial statements are denominated in a currency other than euros, then the

break-even result must be converted into euros at the average exchange rate of the reporting

period, as published by the European Central Bank.

d, The aggregate break-even result is the sum of the break-even results of each reporting period

covered by the monitoring period (i.e. reporting periods T, T-1 and T-2).

e, If the aggregate break-even result is positive (equal to zero or above) then the Licensee has an

aggregate break-even surplus for the monitoring period. If the aggregate break-even result is

negative (below zero) then the Licensee has an aggregate break-even deficit for the monitoring

period.

f, In case of an aggregate break-even deficit for the monitoring period, the Licensee may

demonstrate that the aggregate deficit is reduced by a surplus (if any) resulting from the sum of

the break-even results from the two reporting periods prior to T-2 (i.e. reporting periods T-3 and

T-4).

(5) Notion of acceptable deviation

a, The acceptable deviation is the maximum aggregate break-even deficit possible for a club to be

deemed in compliance with the break-even requirement as defined in Article (7) (97.)

b, The acceptable deviation is EUR 5 million. However it can exceed this level up to the following

amounts only if such excess is entirely covered by contributions from equity participants and/or

related parties:

‒ EUR 45 million for the monitoring period assessed in the licence seasons 2013/2014 and

2014/2015

‒ EUR 30 million for the monitoring period assessed in the licence seasons 2015/16,

2016/17 and 2017/18;

‒ a lower amount as decided in due course by the UEFA Executive Committee for the

monitoring periods assessed in the following years.

c, Contributions from equity participants and/or related parties (as specified in Annex 7 are taken

into consideration when determining the acceptable deviation if they have occurred and been

recognised:

‒ in the financial statements for one of the reporting periods T, T-1 or T-2; or

‒ in the accounting records up to 31 December of the year of the reporting period T.

The onus is on the Licensee to demonstrate the substance of the transaction, which must have

been completed in all respects and without any condition attached. An intention or commitment

from owners to make a contribution is not sufficient for such a contribution to be taken into

consideration.

d, If contributions from equity participants and/or related parties occurring up to the year in which

the UEFA club competitions commence are recognised in a club’s reporting period T+1 and have

been taken into consideration to determine the acceptable deviation in respect of the monitoring

period (T-2, T-1 and T) assessed in the licence season commencing in that same calendar year,



then for later monitoring periods the contributions will be considered as having been recognised

in reporting period T.

(6) Break-even information

a, By the deadline and in the form communicated by the UEFA administration, the Licensee must

prepare and submit:

‒ the break-even information for the reporting period T-1

‒ the break-even information for the reporting period T-2, if not already previously

submitted

‒ the break-even information for the reporting period T, if it has breached any of the

indicators defined in paragraph c. below.

b, The break-even information must:

‒ a) concern the same reporting entity as that for club licensing as defined in L.03,L.04

(45.)

‒ be approved by management, as evidenced by way of a brief statement confirming the

completeness and accuracy of the information, and signature on behalf of the executive

body of the Licensee.

c, If a Licensee exhibits any of the conditions described by indicators 1 to 4, it is considered in

breach of the indicator:

‒ Indicator 1: Going concern principle

The auditor’s report in respect of the annual financial statements (i.e. reporting period T-1) and/or

interim financial statements (if applicable) submitted in accordance with F.01 (47.) includes an

emphasis of matter or a qualified opinion/conclusion in respect of going concern.

‒ Indicator 2: Negative equity

The annual financial statements (i.e. reporting period T-1) submitted in accordance with F.01

(47.) disclose a net liabilities position that has deteriorated relative to the comparative figure

contained in the previous year’s annual financial statements (i.e. reporting period T-2),

‒ Indicator 3: Break-even result

‒ The Licensee reports a break-even deficit as defined in Article (4) (95.) for either or both

of the reporting periods (T-1 and T-2.)

‒ Indicator 4: Overdue payables

The Licensee has overdue payables as of 30 June of the year that the UEFA club competitions

commence as further defined in Annex 10.(2),(3) (99 99,.)

d, In addition, the UEFA Club Financial Control Body reserves the right to ask the Licensee to

prepare and submit additional information at any time, in particular if the annual financial

statements reflect that:

‒ employee benefits expenses exceed 70% of total revenue; or

‒ net debt exceeds 100% of total revenue.

(7) Fulfilment of the break-even requirement

a, The break-even requirement is fulfilled if no indicator (as defined in Annex 10. (6) (97.) is

breached and the Licensee has a break-even surplus for reporting periods T-2 and T-1.



b, 2. The break-even requirement is fulfilled, even if an indicator (as defined in Annex 10. (6) c, 97. )

is breached, if:

‒ the Licensee has an aggregate break-even surplus for reporting periods T-2, T-1 and T;

or

‒ the Licensee has an aggregate break-even deficit for reporting periods T-2, T-1 and T

which is within the acceptable deviation (as defined in Annex 10) having also taken into

account the surplus (if any) in the reporting periods T-3 and T-4 (as defined in Annex 10

(4) f,).

c, The break-even requirement is not fulfilled if the Licensee has an aggregate break-even deficit for

reporting periods T-2, T-1 and T exceeding the acceptable deviation (as defined in the criteria

stated in F.06.1 F.06.2 (50.) having also taken into account the surplus (if any) in the reporting

periods T-3 and T-4 (as defined in Annex 10(4)f,.).

d, If the Licensee does not fulfil the break-even requirement then, by taking also into account other

factors defined in Annex 8 , the UEFA Club Financial Control Body may report the case to the

Judicial Body, which immediately takes all necessary actions in line with the procedure defined

for urgent cases in the UEFA Disciplinary Regulations.

Other provisions pertaining to audit

(1) Provisions pertaining to the updated financial budget

a, By the deadline and in the form communicated by the UEFA administration, the Licensee must

prepare and submit enhanced future financial information that consists of:

‒ an update of the future financial information already submitted to the Licensor according to F 06.1., if it has breached indicator 1 and/or 2 as defined in

‒ Article 20/C. (51.);

‒ new future financial information, if it has breached indicator 3 and/or 4 as defined in

Annex 10. (6)

b, Enhanced future financial information must cover the 12 month period commencing immediately

after the statutory closing date of the reporting period T (hereinafter: reporting period T+1).

c, Enhanced future financial information must consist of:

‒ a budgeted profit and loss account, with comparative annual figures for the reporting

period T (if applicable);

‒ a budgeted cash flow, with comparative annual figures for the reporting period T (if

applicable);

‒ a budgeted balance sheet, with comparative annual figures for the reporting period T (if

applicable);

‒ explanatory notes, including assumptions that are not unreasonable, risks and a

comparison of budget and actual figures; and

‒ a plan for compliance including the break-even calculation for the reporting period T+1

based on the budgeted profit and loss account and including adjustments to calculate

relevant income and expenses as appropriate.

d, In addition, the provisions of F.06.1 criterion apply by analogy to the enhanced future financial

information.



(2) No overdue payables towards football clubs - updated

a, The Licensee must prove that as at 30 June of the year in which the UEFA club competitions

commence it has no overdue payables (as specified Annex 5) towards other football clubs as a

result of transfer activities undertaken up to 30 June.

b, Payables are those amounts due to football clubs as a result of transfer activities, including

training compensation and solidarity contributions as defined in the FIFA Regulations on the

Status and Transfer of Players, as well as any amount due upon fulfilment of certain conditions.

c, By the deadline and in the form communicated by the UEFA administration, the Licensee must

prepare and submit the transfer payables information, even if there have been no transfers/loans

during the relevant period.

d, The Licensee must disclose all transfer activities (including loans) undertaken up to 30 June,

irrespective of whether there is an amount outstanding to be paid at 30 June. In addition, the

Licence Applicant must disclose all transfers subject to a claim pending before the competent

authority under national law or proceeding spending before an authority, arbitration tribunal,

UEFA/FIFA or state court.

e, The transfer payables information must contain the following as a minimum (in respect of each

player transfer, including loans):

‒ player (identification by name or number)

‒ date of the transfer/loan agreement

‒ the name of the football club that formerly held the registration

‒ transfer (or loan) fee paid and/or payable (including training compensation and solidarity

contributions);

‒ other direct costs of acquiring the registration paid and/or payable

‒ amount settled and payment date

‒ balance of the amounts payable at 30 June

‒ due date of the payment

‒ conditional amounts not yet recognised in the balance sheet as of 30 June

f, The Licensee must reconcile the total liability as per the transfer payables table to the figure in

the financial statements balance sheet for ‘Accounts payable relating to player transfers’ (if

applicable) or to underlying accounting records. The Licensee includes in the table the payables

not yet requested by the supplier.

g, The transfer payables table must be approved by Licence Applicant and this must be evidenced

by a brief statement and signature on behalf of the management.

h, If the Licensee is in breach of indicator 4 as defined in (Annex 10 (6) c, (97.)., then it must also prove that, as at the following 30 September, it has no overdue payables towards other football clubs as a result of transfer activities undertaken up to 30 September. Paragraphs b-g above apply accordingly.

(3) No overdue payables towards employees and social/tax authorities - updated

a, The Licensee must prove that as at 30 June of the year in which the UEFA club competitions

commence it has no overdue payables (as specified in Annex 5) towards its employees and/or

social/tax authorities (as defined in the criteria stated in F.04.1 F.04.2 ) that arose prior to 30

June.



b, By the deadline and in the form communicated by the UEFA administration, the Licensee must

prepare and submit a declaration confirming the absence or existence of overdue payables

towards employees and social/tax authorities.

c, The following information must be given, as a minimum, in respect of each overdue payable to

employee:

‒ name of the employee

‒ position/function of the employee

‒ start date of the employment

‒ end date of employment (if applicable)

‒ balance of the amounts payable at 30 June, the due date and explanatory comment

d, The following information must be given, as a minimum, in respect of each overdue payable

towards social/tax authorities, together with explanatory comment:

‒ name of the creditor;

‒ balance overdue as at 30 June, the due date

e, The declaration must be approved by management and this must be evidenced by way of a brief

statement and signature on behalf of the executive body of the Licensee.

f, If the Licensee is in breach of indicator 4 as defined in Annex 10. (6) c, (97.) , then it must also

prove that, as at the following 30 September, it has no overdue payables (as specified in Annex

5) towards employees and/or social/tax authorities that arose prior to 30 September. Paragraphs

b-e above apply accordingly.

(4) Obligation to report subsequent events

a, The Licensee must promptly notify the Licensor in writing about any significant changes including,

but not limited to, subsequent events of major economic importance until at least the end of the

licence season.

b, The information prepared by management must include a description of the nature of the event or

condition and an estimate of its financial effect, or a statement (with supporting reasons) that

such an estimate cannot be made.

(5) General Provisions

If the Licensee does not fulfil the monitoring requirement specified in “Other provisions pertaining to

audit” (98.) then, by also taking into account other factors, the UEFA Club Financial Control Body may

report the case to the Judicial Body, which immediately takes all necessary actions in line with the

procedure defined for urgent cases in the UEFA Disciplinary Regulations.



Annex 11: Personal requirements of the Licensing Administration:

(1) Personal requirements of the Licensing Administration

‒ Adequate staff:

‒ Licensing Manager

o Higher qualifications, at least intermediate level English language skills.

o User level computer skills, category B driving licence,

‒ Licence Expert

o Higher qualifications (preferably in finance or economics), at least intermediate

level English language skills


‒ Monitoring Expert

o Higher qualifications (preferably in finance or economics), at least intermediate

level English language skills


‒ Communications Manager

‒ Administrator

Annex 12: Fee payment

(1) Club Licensing Procedures

a, Section 17. of the Fee Payment Procedure approved by the MLSZ Presidium in its resolution No. 090/2014. (27.05.) regulates the club licensing fee.

b, The clubs must pay the following fees:

‒ UEFA (international) licence and NB I (national first class) licence: HUF 500,000 +

VAT

‒ NB I (national first division) licence HUF 400,000 + VAT

‒ NB II (national second division) licence: HUF 150,000 + VAT

(2) Club Licensing Supplementation Fee

a, Section 18. of the Fee Payment Procedure approved by the MLSZ Presidium in its resolution No. 090/2014. (27.05.) regulates the club licensing supplementation fee.

b, Simultaneously with the payment of the supplementation fee, the applicant club may also

attach new documents to the submitted club licensing documentation by the deadline for the

submission of supplementation in format and/or contents ordered by the First Instance

Committee.

c, Supplementation fee payable by the club into the MLSZ bank account simultaneously with the submission of the supplementation:

‒ UEFA (international) licence and NB I (national first class) licence: HUF 30,000 + VAT

/ criterion



‒ NB I (national first division) licence: HUF 24,000 + VAT / criterion

‒ NB II (national second division) licence: HUF 9,000 + VAT / criterion

d, Fee calculation:

The fee is calculated based on the categorisation of supplementation items by criteria. Consequently, a club ordered to supplement information must (within one supplementation procedure) pay the procedural fees listed as many times as the number of criteria to be supplemented (according to the resolution).

The fee depends on the number of criteria only; if the Committee orders several pieces of information to be supplemented within one criterion, the fee is payable for that criterion only.

(3) Club Licence Appeal Fee

a, Section 19. of the Fee Payment Procedure approved by the MLSZ Presidium in its resolution No. 090/2014. (27.05.) regulates the club licence appeal fee.

b, An appeal may be lodged against the resolution of the First Instance Committee.

c, Appeal fee payable by the club into the MLSZ bank account simultaneously with the submission of the appeal:

‒ UEFA (international) licence and NB I (national first class) licence: HUF 300,000

‒ NB I (national first division) licence: HUF 200,000

- NB II (national second division) licence: HUF 150,000

d, The fee of the appeal submitted against the first instance resolution may be reimbursed to the appealing party if the appeal is successful i.e., the second instance committee alters the first instance resolution as requested.

e, The other provisions and information concerning the appeal are included in the Club Licensing Regulations of the Hungarian Football Federation (MLSZ).

Documents

Club Licensing Regulations 2015 2016 - MLSZ